Silver’s 1980-Style Squeeze Triggers Arbitrage Frenzy As Traders Airlift 1,000-Ounce Bars to London

Gold walked so silver could SQUEEZE… straight through the roof.

Well, the silver market decided to dress up as GameStop (2021 version) for Halloween this year… except this time, it’s not Redditors squeezing the metaphorical lemon. It’s the land of hot tea and bad teeth pulling the strings (I’m talking about London). Silver blew past $52 an ounce (its highest level in more than 40 years) as a historic short squeeze sent traders running for actual, physical metal. 

No joke… people are now flying silver bars across the Atlantic to cash in on London’s sky-high prices. When you’re literally booking cargo slots next to Louis Vuitton shipments, you know sh*t’s gotten weird.

And it gets better… or worse, depending on whether you were short. The premium in London hit $1.60 an ounce over New York prices, meaning silver was literally worth more on one side of the Atlantic than the other. So traders started airlifting bars across the ocean to pocket the spread. It’s the kind of price arbitrage Sam Bankman-Fried used to brag about… back when he was shuttling Bitcoin between Asia and the U.S. instead of trying to convince a jury he just “misplaced” $8 billion.

(Source: Economic Times)

While spot silver jumped 3.7%, topping $52, and gold hovered near $4,100… the real chaos came from silver’s lease rates… now above 30%, meaning it’s insanely expensive to short the metal. Considering the silver market is roughly one-ninth the size of gold’s, even a modest squeeze turns into a full-blown riot.

Basically, anyone betting against silver just got margin-called into oblivion. Goldman Sachs weighed in: “Without central banks anchoring prices, even small inflows move the market like crazy.” Translation: silver trades like gold’s unmedicated little brother.

So what’s causing this madness you ask? Investors have been hoarding silver as a “safe haven” after U.S.-China tariff beef flared up again… Trump teased another 100% tariff on Chinese goods before walking it back. Meanwhile, the London market’s supply is bone dry after months of shipping metal to New York. And the Fed’s rate cuts have thrown starter fluid on every precious metal rally out there. The result is a global game of hot potato… except instead of Idaho’s finest, it’s 1,000-ounce silver bars flying around while traders pray they’re not the ones left holding the bar.

That’s probably why Bank of America just decided to hike its silver price target to $65 by 2026, citing deficits, debt, and dumb fiscal policies (their words, not mine). But to me, Goldman’s warning about a “disproportionate correction” if inflows stop means one thing: if this rally stalls, gravity’s waiting in the parking lot with brass knuckles.

For now, though, silver’s back, baby. The last time it got this spicy was 1980, when the Hunt brothers tried to corner the market and accidentally triggered one of the greatest financial implosions in modern history. If you don’t know how that story ends… let’s just say it didn’t involve yachts and happy endings. Go ahead… Google it.

At the time of publishing this article, Stocks.News holds positions in Gamestop as mentioned in the article.