(Bloomberg) — Silver set a record in October, surpassing the highest level set during the historic fall in the London market.
Spot prices rose 2.6% to above $54.76 an ounce. The white metal has been supported by rising expectations of a Federal Reserve interest rate cut in December, flows into bullion-backed exchange-traded funds and ongoing supply shortages.
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The silver market witnessed erratic price fluctuations and low liquidity on Friday, following hours of chaotic disruption in futures trading on CME’s COMEX exchange. By early morning US time, most business operations had resumed.
Silver’s new high comes just a month after a severe supply shortage in London, a major silver trading hub, in October sent prices soaring above levels in Shanghai and New York. While the arrival of about 54 million troy ounces has eased some of that pressure, the market still remains markedly tight as the cost of borrowing metal over a month remains well above its normal level.
Inflows into the London market have now put pressure on other hubs, including China. Silver stockpiles in warehouses linked to the Shanghai Futures Exchange recently hit their lowest level since 2015, while volumes on the Shanghai Gold Exchange fell to their lowest in more than nine years, according to exchange and brokerage data.
Traders are also monitoring any potential tariffs on silver after the precious metal was added to the U.S. Geological Survey list of critical minerals in November. While 75 million ounces have left the vaults of the COMEX futures exchange in New York since the beginning of October, fears of a sudden premium to U.S. silver are causing some traders to hesitate before sending the metal out of the country.
Spot silver was one ounce higher than in New York. Spot gold rose by an ounce.
–With assistance from Sibilla Gross.
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