US: Silver prices surged to an all-time high above $52.50 an ounce on Tuesday, driven by a historic short squeeze in London and strong demand for safe-haven assets amid global economic uncertainty.
Spot silver rose as much as 0.4 per cent to $52.58 an ounce in London, surpassing the previous record set in January 1980 when the billionaire Hunt brothers attempted to corner the market.
Gold prices also hit a new record, marking eight consecutive weeks of gains, supported by rising geopolitical tensions and expectations of US interest rate cuts.
The rally in silver comes amid concerns over liquidity in the London market, prompting a global rush to secure the metal. Prices in London are trading at a rare premium compared to New York, leading traders to transport silver bars across the Atlantic, a costly process usually reserved for gold, to take advantage of higher prices. The premium stood at around $1.55 an ounce on Tuesday, down from $3 last week.
Adding to the squeeze, silver lease rates in London, the cost of borrowing the metal, surged above 30 per cent for one-month contracts last Friday, making it expensive for traders to maintain short positions.
The situation has been further exacerbated by strong demand from India in recent weeks, which has reduced available supply, following earlier shipments to New York amid fears of US tariffs.
Experts said the latest surge in both gold and silver reflects heightened market uncertainty. Gold prices have risen nearly 60 per cent this year, surpassing the $4,100 mark for the first time, supported by geopolitical tensions, expectations of rate cuts, and strong buying by central banks and investors.
Key US economic data, including inflation and retail sales figures, is due later this week. Analysts caution that if the government shutdown continues, the release of these reports, including jobs data, could be delayed.
IANS
