Silver surges to 45-year high on historic squeeze as gold hits record

Silver climbed to nearly $52 an ounce this week, marking its highest price in decades, as a sudden shortage of available metal in London forced prices skyward in what traders are calling a historic squeeze. Gold, riding alongside it, broke through $4,068 an ounce for the first time ever. Platinum and palladium surged as well, completing a remarkable run across the entire precious metals complex.

The move in silver was particularly violent. Prices jumped as much as 3% in a single session, approaching the $52.50 level set back in 1980 on a now-defunct Chicago futures contract. What made this squeeze so acute was the simple fact that there wasn't enough freely available silver in London to meet demand. The shortage grew so severe that traders began booking cargo space on transatlantic flights to ship silver bars from New York to London — an extraordinarily expensive form of transport normally reserved for gold — just to capture the massive price premiums that had opened up between the two markets. That kind of arbitrage, born of desperation, signals a market under real stress.

Gold's ascent, while less dramatic in percentage terms, carried its own weight. The metal has now gained for eight consecutive weeks, building on a year in which all four major precious metals — gold, silver, platinum, and palladium — have climbed between 50 and 80 percent. The drivers are familiar to anyone watching central banks and geopolitics. The Federal Reserve has been cutting rates, which makes non-yielding assets like gold more attractive. Central banks themselves have been steady buyers. Exchange-traded funds tracking precious metals have seen consistent inflows. And then there are the tensions: US-China trade friction has flared repeatedly, threats to the Federal Reserve's independence have circulated, and a US government shutdown added another layer of uncertainty. Each time investors sense instability, they reach for gold.

The US-China dynamic heated up again just this past weekend. China's government urged Washington to abandon tariff threats and return to negotiations, warning of retaliation if new measures proceeded. President Trump, who had floated the possibility of 100 percent tariffs on Chinese goods the week before, struck a more measured tone in his weekend comments. Yet the mere fact that these tensions can reignite so quickly keeps precious metals bid. As one analyst at Capital.com observed, even when both sides express willingness to talk, trade volatility never truly disappears — and that permanence of risk is exactly what keeps gold attractive.

Underlying the silver squeeze, though, is another concern that few outside the metals trade are watching closely: a pending US government review of critical minerals under something called the Section 232 probe. Silver, along with platinum and palladium, falls within that scope. If the Trump administration decides to impose new tariffs or restrictions on these metals as part of a broader critical minerals strategy, supplies could tighten further. Traders are already nervous about it, and that anxiety has contributed to the drawdown of freely available silver stocks in London — the very shortage that triggered this week's squeeze.

By late trading in Singapore, gold was holding near $4,067 an ounce, up 1.3 percent on the day. Silver had settled above $51, up 2.8 percent. Platinum traded near $1,634, while palladium had climbed as much as 3.6 percent. The dollar index, which typically moves inversely to precious metals, was essentially flat. What happens next depends partly on whether US-China tensions cool or intensify, partly on whether the Section 232 review produces new tariffs, and partly on whether London's silver shortage resolves itself or deepens. For now, the metals are holding their ground at levels that would have seemed impossible just months ago.