The price of silver has hit a record. Persistent deficits are only one of the reasons
Silver prices rose to an all-time high, surpassing the peak recorded in October amid a sharp shortage of the metal in London, a key global bullion trading hub. The spot price of the precious metal jumped 5.5% on November 28 and reached almost $56.3 per ounce. March futures traded above $57. The growth was facilitated by increased expectations of a rate cut by the U.S. Federal Reserve in December, the inflow of investment in exchange-traded funds backed by precious metals, as well as the continuing shortage of physical silver, explains Bloomberg.
On Friday, the market experienced sharp fluctuations and low liquidity - amid an hours-long suspension of futures trading on the CME-owned Comex exchange. By morning New York time, most operations had been restored.
What else affects prices
Traders are watching the risks of imposing duties on silver after the metal was listed as a critical resource by the U.S. Geological Survey in November. Since the beginning of October, about 75 million ounces have been taken out of Comex exchange's vaults, but concerns about a possible increase in premiums on U.S. silver make market participants cautious about exports, Bloomberg notes.
Context
Silver hit a new high just over a month after a major supply crunch in London that sent prices above levels on the Shanghai and New York commodity exchanges. Despite the arrival of about 54 million troy ounces, which partially relieved the tension, the market is still tight: the cost of borrowing silver for one month remains well above normal levels, Bloomberg writes. Increased supply in London has triggered shortages in other regions, including China. Stocks at warehouses tied to the Shanghai Futures Exchange fell to their lowest since 2015, and trading volumes on the Shanghai Gold Exchange hit their lowest level in more than nine years, according to exchange and broker data, the agency notes.
This article was AI-translated and verified by a human editor
