Silver Prices Surge as London Market Faces Supply Crunch
LONDON – A dramatic price spike is squeezing silver supplies in London, with available vault stock dwindling and triggering a scramble for physical metal, according to reports Monday. Bank of America now forecasts silver reaching $65 per ounce, reflecting the intensifying market pressures.
Traders are reportedly chartering cargo planes to expedite silver shipments to London, attempting to capitalize on the price disparity between spot and futures markets. this situation points to a notable short squeeze, evidenced by “backwardation” – where spot prices exceed those of futures contracts.Earlier monday, spot prices reached $50.21 per ounce, while December futures traded at $48.03.
The strain on supply is highlighted by the massive holdings of silver-backed exchange-traded funds. Bullion Vault reported that the largest, SLV, would require 15,415 tonnes of silver to fully back its shares – equivalent to seven months of global silver production. The next two largest ETFs collectively require 3.8 months of mine output.
While dislocations in the silver market aren’t unprecedented, analysts note the current magnitude is exceptional. Ole Hansen of Saxo bank attributes the surge to fundamental drivers apparent throughout 2025,including investor demand for precious metals as a hedge against dollar weakness,inflation,and fiat currency diversification – the so-called “debasement trade.”
Silver is also benefiting from momentum initially driven by gold and, crucially, from robust industrial demand from solar panel manufacturers and the technology sector. The gold-silver ratio currently stands at 81x, compared to a 20-year average of 70, suggesting further potential upside for silver.
Gold prices are also climbing, reaching $4,091 an ounce on Monday, a 5.2% increase or $92.50. The contract settled at a high of $4,043 on october 8, 2025. Bank of America anticipates a $5,000 gold price by 2026.
– Jules Rimmer
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10-13-25 0700ET
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