Silver Price Forecast: Will London’s $50 Squeeze Ignite a New Record High?
Silver is back in the spotlight after a historic short squeeze sent prices above $50 per ounce, a level not seen since the Hunt brothers...
Quick overview
- Silver prices have surged above $50 per ounce due to a historic short squeeze, the highest level since 1980.
- Liquidity in the London bullion market has decreased significantly, leading traders to pay high borrowing costs to cover shorts.
- The squeeze is attributed to structural tightness and macroeconomic concerns, with falling inventories and increased demand driving prices.
- Traders are closely watching upcoming economic data and Fed Chair Jerome Powell's speeches, which could influence silver's momentum.
Silver is back in the spotlight after a historic short squeeze sent prices above $50 per ounce, a level not seen since the Hunt brothers’ corner in 1980. According to Bloomberg, liquidity in the London bullion market has dried up, with traders scrambling to cover shorts and paying astronomical borrowing costs to roll positions.
At one point, spot silver in London traded at a $3 premium to New York futures, a gap not seen even during past crises. Some market participants reportedly booked air cargo shipments of silver bars from the U.S. to the U.K. to take advantage of the price spread, a move usually reserved for gold, not silver.
The squeeze is due to both structural tightness and macro anxiety. London inventories have fallen 75% since 2019, with free float silver down to around 200 million ounces as industrial and investment demand outpaced mine supply. Analysts point to rising Indian imports, U.S. tariff fears and safe-haven flows amid the Washington budget standoff as the main drivers.
Week Ahead: All Eyes on Powell and Inflation Data
This week traders will look beyond the London supply crunch to the macro backdrop. Fed Chair Jerome Powell’s speeches on October 14 and 16, and U.S. PPI, retail sales and unemployment claims will define market sentiment.
If Powell says rate cuts are getting closer as inflation cools, silver, more volatile than gold, could extend its parabolic run. But stronger retail data or hawkish comments may slow down the momentum, and we could see consolidation above the $49–$50 area.
Silver (XAG/USD) Technical Outlook
Silver is in a strong uptrend, making higher highs and higher lows since late September. The midline around $49.70–$50.00 has been a dynamic support, with the metal consolidating at $50.28 recently.
Candlestick action shows spinning tops and small wicks, no major reversal pressure. The 100-period SMMA (46.65) is still sloping up, bullish momentum is intact. The RSI at 56 is healthy with no bearish divergence, room for more upside.
Above $50.96 and we could see a run to $51.83 and $52.64, where the upper channel resistance is. Below $49.73 and we could see a pullback to $48.97 where the prior swing lows and trendline support meet.
Trade Setup: A clean long entry above $50.60 with a stop below $49.70 and targets $51.80–$52.60, is a good risk-reward. As long as silver stays above the mid-channel base, the overall trend is bullish, and volatility and opportunity increases with the London market chaos.
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