Silver surged to a record $52.58/oz amid a global rush for safe-haven assets, a historic short squeeze, and strong demand, as gold also hit new highs on rate cut hopes.

silver prices reached an all-time high of over $52.50 per ounce, driven by a historic short squeeze in London and a robust demand for safe-haven assets in the face of global economic uncertainty.

Spot silver in London increased by up to 0.4% to $52.58 per ounce, surpassing the previous record set in January 1980 when the billionaire Hunt brothers attempted to gain a monopoly on the market.

Gold prices also reached a new record, indicating eight consecutive weeks of growth, bolstered by the anticipation of US interest rate cuts and the escalating geopolitical tensions.

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A worldwide stampede to secure the metal has been prompted by concerns over liquidity in the London market, which has resulted in a rally in silver.

Silver bars are being transported across the Atlantic by traders, a costly maneuver that is typically designated for gold, in order to capitalize on the rare premium that prices in London are currently trading at in comparison to New York.

On Tuesday, the premium was approximately $1.55 per ounce, a decrease from the $3 it was last week.

The cost of borrowing the metal, known as silver lease rates in London, increased by over 30% for one-month contracts last Friday, further exacerbating the situation. Consequently, traders were compelled to pay a premium to maintain short positions.

The situation intensified as a result of the substantial demand from India in recent weeks, which further diminished the available supply. This was in addition to the earlier cargoes to New York, which were delayed due to concerns regarding potential US tariffs.

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The most recent increase in the prices of both gold and silver, according to experts, is indicative of the increased market uncertainty.

The price of gold has increased by nearly 60% this year, surpassing the $4,100 threshold for the first time. This increase has been fueled by geopolitical tensions, expectations of rate cuts, and robust investor and central bank purchases.

Analysts caution that the publication of critical US economic data, including retail sales and inflation, may be postponed if the government shutdown persists.