Published: Friday, October 10, 2025 · 5:56 PM | Updated: Friday, October 10, 2025 · 5:56 PM
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(Bloomberg) — Silver surged toward a record above $50 an ounce as a historic squeeze deepened in the London market.
Spot prices rose as much as 3.7% in a chaotic day of trading, with the rally cooling partially after US President Donald Trump threatened a “massive increase” of tariffs on goods from China.
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The surge in prices has been driven by a flood of investment into precious metals and other haven assets, amid mounting worries about the US economy and an overheating stock market. Gold broke through $4,000 for the first time earlier this week, while silver’s rally put it within striking distance of a peak set during a notorious attempt to corner the market in the 1980s.
“Often a move in gold can be followed by an exaggerated move in silver,” said Amy Gower, a strategist at Morgan Stanley. “The latest move this week has been driven by fears of physical market tightness.”
Silver is up more than 70% this year, far outpacing gold’s advance. In the past week, the rally has gone into overdrive amid growing signs of stress in the London market, the epicenter of global bullion trading.
The cost of borrowing the metal for one month in London reached an annualized record of 35% on Thursday, in a sign that the volumes readily available to buyers have sunk to critically low levels.
Earlier this year, fears that the US could levy tariffs on silver spurred a rush of metal to New York, drawing down inventories in London and reducing the amount of metal available to borrow. Much of the silver in London is held in vaults backing exchange-traded funds, and not readily available to buy or borrow on the market.
The London Bullion Market Association — an industry group which oversees the city’s precious metals markets — said it is aware of tightness in the silver market and is actively monitoring the situation. It is also “seeking clarification from US Customs regarding reciprocal tariffs on silver,” a spokesperson said in an emailed statement.
The tightness in London has meant a typical premium of a few cents for futures in New York collapsed into a discount of more than $2.50 an ounce below spot prices.
The scale of that dislocation may end up easing tightness in London as traders buy cheaper metal in the US and ship it to the UK to capture the difference. But for now, the squeeze is driving prices closer to the $52.50-an-ounce record from 1980, set on a now-defunct contract on the Chicago Board of Trade exchange.
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