Published by Global Banking & Finance Review®
Posted on October 10, 2025
3 min readLast updated: January 21, 2026
Add as preferred source on GoogleComex silver is returning to London due to record spot prices, driven by shortages and high demand from ETFs. Tariff implications remain uncertain.
By Ashitha Shivaprasad
LONDON (Reuters) -Silver that flooded into the United States earlier this year due to fears of tariffs on imports is likely to head back to the London physical market, where shortages of available metal drove the spot price above U.S. futures.
Traders seeking to avoid potential tariffs have been shipping silver to the United States due to its inclusion on a draft list of U.S. critical minerals in September, part of a push to secure domestic supply chains for key metals.
Spot silver was trading around $50.10 per ounce on Friday, after hitting a record high of $51.22 on Thursday, while silver futures on Comex were last at $48.1.
That price differential is wide enough to make it profitable for traders to bring silver back to London, analysts said.
"There's a genuine shortage of silver (in London), but you've got 500 million ounces sitting in Comex doing nothing," Ryan Mangan, head of global metals and bulks trading at Macquarie said at a briefing on Thursday.
Silver inventories on Comex at 526.1 million troy ounces are close to the record high of 531.9 million ounces hit on October 3.
"So much silver went to the U.S. that there's now almost four years' worth of domestic demand stockpiled," said Adrian Ash, head of research at online marketplace BullionVault. "In London, lease rates are a little over 11%, which is phenomenal."
Silver lease rates refer to the cost of borrowing physical silver and are an indicator of demand.
They are high because of low liquidity in London due to a recent jump in demand from silver-backed exchange-traded funds which came on top of previous flows to the U.S., said a precious metals trader.
The effect from the tightness in the London market can already be seen in India, where Kotak Mahindra Asset Management Company temporarily halted fresh lump-sum investments in its silver ETF-of-fund on Thursday to protect investors.
The metals market expects to hear next week from the U.S. probe into potential tariffs on critical mineral imports ordered by U.S. President Donald Trump in April. However, the government shutdown could delay any decision.
"I don't think the market will send too much back unless tariff implications are very clear," said Tai Wong, an independent metals trader.
(Reporting by Ashitha Shivaprasad in London; additional reporting by Polina Devitt; editing by Pratima Desai and Emelia Sithole-Matarise)
Spot price refers to the current market price at which a particular asset, such as silver, can be bought or sold for immediate delivery.
Silver lease rates indicate the cost of borrowing physical silver and reflect the demand for silver in the market.
A futures contract is a legal agreement to buy or sell an asset at a predetermined price at a specified time in the future.
Inventory analysis involves assessing the levels of stock available, which helps in understanding supply and demand dynamics in the market.
Tariffs are taxes imposed on imported goods, which can influence trade patterns and pricing in the domestic market.
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