Silver price hits $50 for first time since 1980

Staff Writer | October 9, 2025 | 9:42 am Markets Europe USA Silver 

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Silver reached the $50-an-ounce level for the first time in decades on Thursday as surging demand for safe-haven assets led to a squeeze on the already-tightened London bullion market.

Spot silver traded as high as $51.23 per ounce, the highest since a notorious squeeze orchestrated by the billionaire Hunt brothers in 1980, as investors continued to pile into precious metals.

This takes silver’s year-to-date gains to nearly 70%, even surpassing that of gold, which scaled record highs 40 times in 2025 and recently hit the $4,000-an-ounce milestone.

The precious metals rally comes amid rising demand for haven assets sparked by US fiscal risks, an overheating stock market and threats to the Federal Reserve’s independence. These uncertainties have boosted the so-called “debasement trade” — characterized by a reallocation away from fiat currencies and into “harder” assets.

“The conversation around debasement, irrespective of its realities, has ignited investors’ enthusiasm towards gold and silver to the point where regression analysis gives way to something more akin to how investors view AI or the technology sector,” Kieron Hodgson, commodity analyst at Peel Hunt, said in a note to Bloomberg.

Market in deficit

Behind silver’s fast rise is its dual role as both an investment asset and an industrial input. The metal is a key ingredient in solar panels and wind turbines, which collectively account for more than half of its demand.

This year, demand for the metal is expected to exceed supply for the fifth consecutive year, according to Silver Institute forecasts.

“I think the deficits are the slow burn,” said Philip Newman, director of consultancy Metals Focus. “Just the size of the deficits have been so remarkable, and it takes time for that to manifest itself in the price.”

London constraints

Meanwhile, the silver market in London has also tightened to an almost unprecedented degree, with sky-high borrowing costs for the metal. This year, fears that the US could label the metal as a critical mineral and levy tariffs spurred a dash to ship the metal into New York, drawing down inventories in London.

Much of the stock of silver in London is held in vaults backing exchange-traded funds, and therefore not available to buy or borrow on the market.

“I think when you look at above-ground stocks of silver in London you are looking at an increasingly small share, which is not allocated against ETFs,” Newman said.

However, TD Securities recently said that this massive silver squeeze is approaching its “end game” as the London market begins to restore its liquidity.

Silver volatility

While silver often moves in tandem with gold, sharing its strong negative correlation with the US dollar and interest rates, it is much more volatile than its more expensive sister metal.

The metal also has a stronger cult following among retail investors, who view silver as being suppressed by large banks and institutions.

That impassioned following has helped drive sharp rallies in silver in 2011 and 2020, when it surged 140% in less than five months. Over the following year, Redditors jumped on board, while #silversqueeze rapidly gained momentum on social media.

In 1980, it was the Hunt brothers, Texan oil billionaires and notorious speculators, whose fear of inflation and belief in the metal as a store of wealth prompted them to try to corner the global market. They stockpiled more than 200 million oz. of silver, driving the price above $50 before it crashed below $11.

That makes silver one of only a small handful of markets whose record highs from the commodity spikes of the 1970s and 1980s have yet to be surpassed. In inflation-adjusted terms, silver’s new high is only worth approximately one quarter of its 1980 peak, according to Bloomberg.

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