FX.co ★ Silver Rallies on London Squeeze, Liquidity Concerns

Silver surged over 1% to surpass $53 per ounce on Tuesday, reaching unprecedented highs. This spike was driven by an intense short squeeze and liquidity constraints in London that prompted traders to urgently obtain physical supplies worldwide. Lease rates in London escalated by more than 30% on Friday, rendering the costs of rolling over short positions unsustainable. Concurrently, increasing demand from India over recent weeks has further tightened supply, following prior shipments of silver to New York amid concerns over potential US tariffs on the metal. On the geopolitical landscape, attention remained centered on US-China trade interactions as a possible meeting between President Trump and President Xi in South Korea loomed later this month. Additionally, growing expectations of another quarter-point rate cut by the Federal Reserve this month, along with a probable move in December, continued to bolster precious metals markets.