Silver Hits All-Time High Amid London Squeeze

Why this matters: These factors indicate a potentially sustained rally in silver prices, driven by both supply constraints and macroeconomic factors. Investors and traders should closely monitor these trends to make informed decisions.

Silver prices have experienced a remarkable surge, primarily influenced by a short squeeze in the London market and increasing demand for safe-haven assets. The spot prices in London rose to $52.8983 an ounce, surpassing the peak set in January 1980. This rally is further supported by the rise in gold prices, which also reached a record high.

The situation in London is characterized by liquidity concerns, prompting a worldwide hunt for silver. Benchmark prices have soared to unprecedented levels over New York, leading some traders to transport silver bars via transatlantic flights to capitalize on the higher prices in London. The premium stood at approximately $1.15 an ounce in early trading.

Silver lease rates have spiked to over 30% on a one-month basis, creating substantial costs for those looking to roll over short positions. Demand from India has also played a role, depleting the supply of available bars in London.

Analysts at Bank of America Corp. have revised their end-of-2026 price target for silver to $65 an ounce, citing persistent market deficits, elevated fiscal gaps, and lower interest rates.

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The surge is primarily due to a short squeeze in London, increasing demand for safe-haven assets, and supply constraints.

Bank of America analysts predict silver could reach $65 an ounce by the end of 2026.

Silver lease rates represent the annualized cost of borrowing silver in the London market.

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