Silver has reached a historic high, surpassing the October record set amid significant shortages in the London market. Spot prices have risen by 2.6%, breaking $54.76 per ounce, as the rally continues, fueled by expectations of a Federal Reserve rate cut in December, strong capital inflows into silver-backed ETFs, and an ongoing deficit of physical metal.
Friday’s session saw low liquidity and volatile fluctuations in both gold and silver after a lengthy technical failure at the COMEX exchange halted futures trading. The resumption of trading highlighted the fragility of a market still reeling from the October shock, when London faced acute metal shortages, sending prices soaring above levels seen in Shanghai and New York. The delivery of nearly 54 million ounces helped partially stabilize the situation, but the market remains tight, with rates for monthly silver borrowing still significantly exceeding normal levels.
The flow of silver into London has led to depleted supplies in other regions. Stockpiles at the Shanghai Futures Exchange have fallen to their lowest level since 2015, signaling a global supply imbalance. Considering this, traders are assessing the likelihood of new tariffs. In November, the US Geological Survey classified silver as a critical mineral, adding to the market's anxiety. Since early October, approximately 75 million ounces have been withdrawn from COMEX warehouses, further indicating that physical metal is becoming a scarce asset.
The market continues to be driven by limited supply, technical disruptions, and growing investor interest in tangible assets. Judging by current trends, silver shows no signs of relinquishing its leadership in this small but highly energetic race.
