Worldwide Silver Market Hits Historic Squeeze Amid Indian Buying Frenzy

Upgraded 20 October 2025 at 17:23 IST

India’s Diwali silver purchasing craze, integrated with ETF need and supply scarcities, set off a historical international silver capture. Rates rose above $54/oz as stocks in India, London, and China ran low, exposing vulnerabilities in the worldwide silver market.

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Representational Image|Image: Freepix

The worldwide silver market has actually experienced an unmatched stress as need from India hit enduring supply pressures, pressing costs to tape-record highs before a sharp, abrupt drop., according to a special post by Bloomberg.

The trigger for the capture was India’s joyful season, especially the Dhanteras vacation, when numerous millions generally purchase rare-earth elements to honor the goddess of wealth. This year, social media-driven buzz, led by influencers like financial investment lender Sarthak Ahuja, motivated a shift from gold to silver. As an outcome, Indian purchasers rapidly diminished regional stocks, sending out premiums above global rates to unmatched levels of $5 per ounce.

Supply restrictions in other areas enhanced the crisis. China’s short-lived shutdown for a legal holiday restricted shipments, while London’s bullion vaults, which underpin international rates, were mostly secured exchange-traded funds. The rise in silver ETF financial investments, driven by worries over United States dollar stability, even more minimized the totally free float of physical metal. JPMorgan, a crucial provider to India, verified it might not provide extra silver up until November, highlighting the worldwide causal sequence.

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The traffic jam set off mayhem in London, where loaning expenses for silver briefly struck annualized rates of 200 percent. Traders reported severe volatility, large bid-ask spreads, and uncommon arbitrage chances, indicating a market nearing dysfunction. Historic parallels were drawn to the Hunt bros’ 1980 cornering effort and Warren Buffett’s 1998 capture, though specialists keep in mind that existing conditions originate from real supply scarcities instead of speculative control.

Market experts point out a confluence of elements: a solar market boom driving commercial silver need, preemptive United States tariff deliveries, and the current retail purchasing rise. Physical silver stocks stay seriously low, and logistical obstacles in moving stock from New York or China to London indicate the marketplace might stay under tension for weeks.

By recently, rates had actually risen above $54 per ounce before toppling, showing both the strength of the purchasing spree and the remedy for inbound supply. Market watchers state the episode highlights the fragility of worldwide silver supply chains and the outsized impact of focused, seasonal need.