Silver prices break through $51, reaching the highest record since the Hunt brothers' short squeeze!

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The spot silver price has broken through the $50 mark, reaching its highest level since the Hunt Brothers squeeze in the 1980s. A surge in demand for safe-haven assets and tight supply in the London precious metals market have jointly driven this historic breakthrough.

On Thursday, spot silver stood at $51, hitting a new high with a daily increase of 4.5%. This price level is the highest in decades, second only to the record set during the Hunt Brothers squeeze in January 1980.

This breakthrough means silver has risen over 70% this year, outperforming even gold, which has repeatedly hit new highs, and making it the biggest winner in the precious metals market.

Concerns over U.S. fiscal risks, an overheated stock market, and growing threats to the Federal Reserve’s independence have all prompted investors to seek safe-haven assets. At the same time, a severe supply shortage has emerged in the London silver market and borrowing costs have soared, further supporting price increases.

"Devaluation trade" pushes precious metals higher

Investors are flocking to assets seen as safe, such as Bitcoin, gold, and silver, while pulling money out of major currencies. This phenomenon, known as the "devaluation trade," reflects market concerns that inflation and unsustainable fiscal deficits will erode the value of financial securities.

Silver and gold typically move in sync, and both have a strong negative correlation with the U.S. dollar and Federal Reserve interest rates. But silver is more volatile, and has a fanatical following among retail investors who believe its price has been artificially suppressed by large banks and institutions.

This fervor drove silver prices sharply higher in both 2011 and 2020. In 2020, silver soared 140% in less than five months, and the #silversqueeze topic spread rapidly across social media as Reddit users joined in.

Tight supply in London market fuels price surge

The London silver market is seeing unprecedented tightness, with the cost of borrowing silver soaring to astronomical levels. Since the beginning of this year, concerns that the U.S. may impose tariffs on silver have triggered a rush to ship silver to the U.S., depleting London’s inventories and reducing the amount of silver available for lending.

On Thursday, New York silver futures prices were far below the London benchmark, a normally positive price premium that had unusually reversed. On the New York Mercantile Exchange, silver futures remain below the all-time high of $50.35 per ounce set in January 1980.

Strong industrial demand keeps supply and demand imbalanced

Silver is not just an investment asset, but is widely used in industrial applications such as solar panels and wind turbines, which account for more than half of all silver sales. Silver demand is expected to outpace supply for the fifth consecutive year in 2025.

According to Bloomberg data, the daily price auction on the London spot market on January 18, 1980, set a record high of $49.450. A spokesperson for the Chicago Mercantile Exchange said that Comex’s all-time high was also reached on the same day.

Although silver has hit a new nominal high, after adjusting for inflation the value is only about one fourth of the 1980 peak. Silver remains one of the few markets where the record highs set during the commodity booms of the 1970s and 1980s have not yet been surpassed to this day.

In retrospect, in 1980, Texas oil billionaire and renowned speculator the Hunt Brothers, driven by fear of inflation and faith in silver’s value as a store of wealth, attempted to corner the global silver market. They hoarded more than 200 million ounces of silver, driving its price above $50 per ounce, before prices later collapsed below $11.

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