Core Viewpoint - The London Bullion Market Association (LBMA) silver price has surpassed $50 per ounce, reaching a historical high, but Goldman Sachs warns of potential market adjustments due to physical delivery difficulties expected to ease in the next 1-2 weeks [1][3]. Group 1: Supply Tension - The current supply tension in the silver market is reflected in the extreme leasing rates, with one-month rates soaring to -21% and daily rates hitting -200%, indicating severe physical supply constraints in the London spot market [1][3]. - The LBMA spot price has notably diverged from the COMEX futures price, with a rare premium of $2.7 for LBMA over COMEX [3]. - Strong ETF buying and high retail demand in India ahead of the Diwali festival are key drivers of the supply tension, alongside a tight LBMA inventory due to increased imports related to U.S. tariffs [4]. Group 2: Delivery Challenges - The logistics of delivering silver from the U.S. to London face significant hurdles, requiring 2-3 weeks to gather metal from various delivery warehouses, and not all COMEX brands meet LBMA delivery standards [5]. - The uncertainty surrounding the timing of physical delivery for December COMEX longs adds to financing costs and complicates the decision-making for LBMA shorts [5]. Group 3: Market Adjustments - Goldman Sachs anticipates that a significant influx of physical silver from China and the U.S. will alleviate the LBMA market tension in the next 1-2 weeks, although the adjustment process is expected to be highly volatile [7]. - The current demand significantly exceeds available supply, suggesting that supply-demand dynamics will ultimately dictate price movements, with market participants needing to prepare for imminent volatility [7].