Silver prices soared to a historic high near $53 an ounce, driven by a short squeeze in London and an intensifying global scramble for safe-haven assets.
Spot silver rose as much as 1% to $52.8983 an ounce, surpassing the record set in January 1980 when the billionaire Hunt brothers tried to corner the market. In India, silver prices surged to Rs 189 per gram and Rs 1.89 lakh per kilogram.
Gold also touched a fresh all-time high, extending its winning streak to eight straight weeks, buoyed by continued demand from investors seeking stability amid geopolitical and economic uncertainty.
The latest surge follows mounting liquidity concerns in the London market, where benchmark prices have climbed well above those in New York. The premium – which hit $3 last week – stood around $1.15 an ounce on Tuesday. The wide spread has prompted traders to airlift silver bars across the Atlantic to capitalize on price gaps, a costly strategy usually reserved for gold shipments.
This marks only the third time in history that silver prices have crossed the $40 threshold – previously in 1980 and 2011. The first rally was fuelled by inflation fears and Middle East turmoil, while the second followed the Eurozone debt crisis.
This year’s rally has been underpinned by massive inflows into silver-backed Exchange Traded Products (ETPs), aggressive long positioning by traders, and rising industrial and investment demand. The annualized cost of borrowing silver in the London market – or lease rates – has surged to more than 30%, creating enormous costs for short sellers and amplifying the squeeze. Strong Indian demand has further strained supply, after earlier shipments to New York created shortages in London.
“Unlike gold, silver tends to be more cyclical, responding sharply to global economic trends, which creates higher potential returns but also greater volatility,” said Manav Modi, Analyst – Precious Metals, Motilal Oswal Financial Services. “The recent halt of inflows into silver ETFs shows supply pressures in the market. Prices may continue to outperform in the near term, but investors should be prepared for fluctuations,” he added.
Concerns over potential US tariffs on critical minerals have also kept traders on edge. Although precious metals were exempted from levies in April, the ongoing Section 232 probe in Washington has revived fears that silver, platinum, and palladium could be included in future restrictions, further tightening supply.
According to Goldman Sachs, the silver market is roughly nine times smaller than gold’s, amplifying price swings. “Without a central bank bid to anchor silver prices, even a temporary pullback in investment flows could trigger a disproportionate correction,” analysts noted.
“Silver’s appeal is twofold: it acts as a hedge against economic uncertainty and offers industrial exposure,” said Aksha Kamboj, Vice President of the India Bullion & Jewellers Association (IBJA). “Investors should consider a disciplined, systematic approach to benefit from potential price movements while managing risk.”
Yash Sedani, Assistant Vice President, Investment Strategy at 1 Finance, said: “For investors with a moderate risk appetite, the key lies in maintaining a disciplined asset allocation aligned with their financial goals and risk tolerance. Every asset class, including gold and silver, has its own characteristics, return cycles, and volatility patterns. Chasing short-term rallies driven by market sentiment or global events can derail long-term wealth creation. Precious metals can play a role as a hedge or diversifier, but their weight in the portfolio must be calibrated based on the investor’s profile, not recent performance. A 1-year surge should not dictate allocation decisions. It’s advisable to work with a qualified financial advisor to build and review a personalised asset allocation strategy. Balance, not impulse, ensures peace of mind and financial resilience across market cycles.”
Still, the momentum remains strong. Precious metals have gained between 56% and 81% this year. With expectations of further Federal Reserve rate cuts, analysts believe both silver and gold could extend their record-breaking rallies. Bank of America has raised its 2026 silver target to $65, citing persistent supply deficits and lower global interest rates.