Image: Nicky Loh/Bloomberg/Getty Images
Silver prices have soared to unprecedented heights this month, striking $54 an ounce before sliding, after a rare global squeeze left traders scrambling for metal. The rally began in India, where record festive demand for Diwali collided with tight global supplies. Spurred by viral social-media hype and a belief that silver would follow gold’s surge (up 58% year-to-date, versus silver’s 69%), millions of Indian buyers emptied refineries and bullion dealers, forcing importers to turn to London—only to find its vaults nearly bare.
Three forces amplified the shortage. One is a years-long boom in solar power, which devours industrial silver. Another was a rush to ship metal to America ahead of “Liberation Day” tariffs under Donald Trump. The last is an investor stampede into silver exchange-traded funds, a “debasement trade” against a weakening dollar. The last time silver markets went this crazy was in 1980, when the Hunt brothers attempted to corner the market. Yet unlike that episode, today’s crisis stems not from manipulation but from genuine scarcity. Demand for silver has surpassed global mine supply for five straight years. The world’s oldest monetary metal has become its newest gauge of financial strain. ■