London Silver Prices Soar Past $50/oz in 2025 – First Time Since 1980 – Triggering a Historic Short Squeeze
- Why Is Silver Hitting Record Highs in 2025?
- How Bad Is the Liquidity Crunch?
- What’s Driving the Demand Surge?
- Could This Be Worse Than 1980?
- FAQs: Your Burning Questions Answered
The silver market is in chaos as prices blast past $50 per ounce in London for the first time since 1980, sparking a brutal short squeeze. Traders are scrambling to cover positions, shipping bullion across oceans, and paying absurd borrowing costs. A perfect storm of surging Indian demand, shrinking inventories, and U.S. tariff fears has left liquidity bone-dry. Here’s why this isn’t another Hunt Brothers saga—and what happens next.
Why Is Silver Hitting Record Highs in 2025?
The London silver benchmark smashed through $50/oz on October 10, 2025—a level not seen since the infamous 1980 squeeze. Unlike the Hunt Brothers’ engineered crisis, this rally stems from organic demand shocks. Indian buyers, spooked by Hong Kong’s Golden Week shutdown, flooded London orders. Meanwhile, ETF holdings (like India’s iShares Silver Trust) froze inflows due to domestic shortages. Bloomberg data shows London’s vaults now hold just 200M oz of "free" silver—down 75% from 2019. "This isn’t manipulation; it’s physics," quipped BTCC analyst Daniel Ghali. "When demand outstrips supply by this margin, prices go kaboom."
How Bad Is the Liquidity Crunch?
"Unprecedented" doesn’t cut it. Bid-ask spreads ballooned from 3 cents to 20 cents overnight. Overnight borrowing rates spiked above 100%—yes,. Greenland Investment’s Anant Jatia put it bluntly: "Banks won’t quote each other. The market’s a ghost town." Even the 135-year-old London silver auction struggled, with premiums over New York hitting $3/oz. Physical traders are now chartering cargo planes to MOVE bars from NYC to London, a tactic usually reserved for gold. "It’s like 1980, but with fewer mustaches and more panic," joked ex-JPMorgan trader Robert Gottlieb.
What’s Driving the Demand Surge?
Three factors collided:
- Indian Buying Spree: Post-Golden Week, Indian ETFs redirected orders from Hong Kong to London, draining 30% of LBMA inventories since mid-2021.
- ETF Lock-Up: Over 650M oz sit trapped in ETFs like iShares, inaccessible to physical traders.
- Trump Tariff Jitters: Fears of Section 232 import duties under the U.S. "critical minerals" probe spooked arbitrage traders.
The LBMA admitted to "active monitoring" but hasn’t intervened. Meanwhile, the U.S. government shutdown threatens customs delays, worsening the gridlock.
Could This Be Worse Than 1980?
In 1980, exchanges froze speculation, forcing liquidations. Today? No such lifeline exists. "Regulators have no playbook here," noted Gottlieb. The only fixes are ETF sell-offs or transatlantic silver flights—both sluggish solutions. One BTCC desk reported a client paying $1.2M just toa position overnight. "When you’re short silver in 2025, you’re basically volunteering for financial waterboarding," quipped a London trader.
FAQs: Your Burning Questions Answered
How high could silver prices go?
With London premiums at $3/oz and borrowing costs exceeding 100%, parity with 1980’s $52.50 peak seems plausible—but volatility is extreme.
Is this another Hunt Brothers situation?
No single actor exists. This is a structural squeeze fueled by ETF hoarding, Indian demand, and logistical nightmares.
Should I invest in silver now?
This article does not constitute investment advice. That said, even seasoned traders are calling this "untradeable."
