Silver (XCMX-SI1!) continues to ascend in global markets, with spot prices rising 1.6% to $37.59 an ounce marking the highest level since September 2011. Meanwhile, US futures for September delivery reached an even steeper $38.46, a divergence that highlights a rare and persistent dislocation between major trading venues.
Historically, arbitrage activity tends to quickly neutralize such discrepancies. However, earlier this year, potential US tariffs on silver imports prompted a spike in domestic futures prices, creating a rush to transfer bullion to COMEX-affiliated storage facilities in New York. This movement subsided only after US authorities clarified that silver would not be exempt from proposed levies.
Current market dynamics point to a tightening supply environment. Borrowing costs in London a key indicator of physical availability have surged to approximately 4.5% annualized, well above normative levels. This spike correlates with increased inflows into silver-backed exchange-traded funds (ETFs), which on Thursday alone added 1.1 million ounces to their holdings, according to Bloomberg data.
Silver’s dual role continues to intensify demand. In addition to its value as a financial asset, the metal remains indispensable for industrial applications particularly in renewable energy technologies such as solar panels. With global demand rising and supply shortfalls persisting, industry analysts forecast a fifth consecutive annual market deficit.