[Silver Breaks $50, Liquidity Crisis in the London Market]
The price of silver has surpassed $50 per ounce, triggering a severe liquidity crisis in the London silver market. A massive short squeeze has caused an extreme shortage in the supply of physical silver, leaving short sellers struggling to obtain silver for delivery and forcing them to pay exorbitant borrowing costs to roll over their positions. Some traders have even resorted to transporting silver bars via transatlantic flights, a method typically reserved for higher-value assets like gold.
Anant Jatia, Chief Investment Officer of Greenland Investment Management, stated that market liquidity has almost completely dried up, with the premium of the London silver market over the New York market surging from the usual 3 cents to over 20 cents. Robert Gottlieb, Managing Director at JPMorgan, noted that the decline in interbank quoting willingness has widened spreads, further exacerbating the liquidity shortage.
