Silver prices touched an all-time high above $52.50 an ounce, as a historic short squeeze in London added momentum to a rally that’s been fueled by surging demand for safe-haven assets.

Spot prices rose as much as 0.4% to $52.5868 an ounce in London, surpassing a peak set in January 1980 on a now-defunct contract overseen by the Chicago Board of Trade — when the billionaire Hunt brothers attempted to corner the market. Gold also climbed to another record high, building on eight straight weeks of gains.

Concerns about a lack of liquidity in London have sparked a worldwide hunt for silver, with benchmark prices soaring to near-unprecedented levels over New York. That’s prompting some traders to book cargo slots on transatlantic flights for silver bars — an expensive mode of transport typically reserved for gold — to profit off higher prices in London. The premium was at about $1.55 an ounce in early trading on Tuesday — down from a spread of $3 last week.

Silver lease rates — which represent the annualized cost of borrowing metal in the London market — have been persistently high this year, but surged to more than 30% on a one-month basis on Friday. That’s creating eye-watering costs for those looking to roll over short positions. A jump in demand from India in recent weeks has drawn down the supply of available bars to trade in London, following a rush to ship metal to New York earlier this year after worries that the metal could be hit with U.S. tariffs sparked large dislocations between the two trading hubs.

While precious metals were officially exempt from levies in April, traders remain on edge ahead of the conclusion of the U.S. administration’s so-called Section 232 probe into critical minerals — which includes silver, as well as platinum and palladium. The investigation has revived fears the metals could be swept up in new tariffs, exacerbating market tightness.

The silver market “is less liquid and roughly nine times smaller than gold’s, amplifying price moves,” Goldman Sachs Group Inc. analysts wrote in a note. “Without a central bank bid to anchor silver prices, even a temporary pullback in investment flows could trigger a disproportionate correction, as it would also unwind the London tightness that drove much of the recent rally.”

The four main precious metals have surged between 56% and 81% this year, in a rally that’s dominated commodity markets. Gold’s advance has been underpinned by central-bank buying, rising holdings in exchange-traded funds, and rate cuts by the Federal Reserve. Demand for havens has also been aided by recurrent U.S.-China trade tensions, threats to the Fed’s independence, and a U.S. government shutdown.

On Monday analysts at Bank of America Corp. hiked their end-of-2026 price target for silver from around $44 an ounce to $65, citing persistent market deficits, elevated fiscal gaps and lower interest rates.

Investors were also weighing the outlook for the Fed’s monetary easing path ahead of the central bank’s next interest-rate decision later this month. Philadelphia’s Fed Bank President Anna Paulson on Monday signaled she favors two more quarter-point cuts this year as policy should look through the impact of tariffs in consumer price increases. Lower borrowing costs then to benefit precious metals, which don’t pay interest.

Spot gold was up 0.5% at $4,129.80 an ounce at 7:38 a.m. in Singapore, after climbing 2.3% on Monday. The Bloomberg Dollar Spot Index was flat, after gaining about 1% last week. Silver was up 0.3%, while platinum and palladium jumped.

(With assistance from Mark Burton.)

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