Silver Lease Rates are SURGING OVER 6%, Just Like Platinum did before its MAJOR BREAKOUT
Silver shortages hit London as lease rates skyrocket, fueling fears of a historic price squeeze and a violent breakout reminiscent of platinum’s explosive rally.
Platinum’s Recent Breakout: The Canary in the Coal Mine
Just weeks ago, the platinum market provided a stunning warning to metals investors: lease rates for physical platinum began spiking in late spring, ultimately peaking above 22% in June as supply tightened and above-ground inventories plunged to multi-year lows.
This was a flashing warning signal for those watching precious metals, and it didn’t take long for prices to respond. Platinum surged from under $1,000 to over $1,400 an ounce, gaining 40% in just a few months and hitting 11-year highs.
The pivotal cause? A squeeze in available supply—driven by mining disruptions in South Africa and booming industrial and jewelry demand—triggered a scramble by refiners and manufacturers to secure physical metal at any cost, the canary in the coal mine for precious markets.
Silver Lease Rates Follow the Same Script
Now, a similar drama is unfolding in the silver market. Silver lease rates have surged above 6 percent—levels not seen in years and a clear signal of physical tightness.
Earlier in the year, the Comex filled its warehouses, but the focus has shifted: the London Bullion Market Association, or LBMA, is at the edge of available silver to lend. As these rates spike higher, ETF stockpiles are tapped to meet demand—an unsustainable, short-term fix.
Just last Friday, one-month silver lending rates in London soared beyond 4.5 percent, far above the usual near-zero levels. These spikes mark extreme scarcity, a reality stretched by strong ETF inflows, robust industrial use, and a string of annual supply deficits.
Paper versus Physical: Comex vs. Shanghai
Western silver trading is dominated by the Comex, where paper silver—derivative contracts—have multiplied, sometimes resulting in hundreds of claims on a single ounce of physical metal. Most contracts never settle with actual delivery.
Instead, settlement happens in cash, which allows market makers to suppress prices through tactics like spoofing, dumping, and other financial games, despite true physical tightness.
Savvy investors understand this
Case Study: Mr. David Bateman
David Bateman purchased 13,490,000 ounces of silver and stood for delivery because physical silver in London has plunged to record lows, with free-float inventories nearly depleted.
Surging industrial demand, ETF accumulation, silver being hoarded as a monetary metal and US tariffs have drained supplies, pushing lease rates as high as 8%.
Bateman’s move anticipates an imminent physical squeeze—if delivery is demanded, there 100% won’t be enough silver available, threatening dramatic price spikes and market instability.
Contrast that with Shanghai’s primary silver exchanges, which require physical delivery. When prices diverge, arbitrageurs buy in the West and move metal eastward, draining vaults in New York and London. Spoofing and paper shorts may temporarily push prices down, but strong Asian demand now creates a steady floor for global silver.
Systemic Risks Mount
Buyers in the East understand the vulnerability: a handful of Western banks control enormous short positions in paper silver. This true shortfall in physical silver is now forcing delivery, the resulting reckoning will undoubtedly threaten the stability of the entire US banking system.
With lease rates surging and available stockpiles ever thinner, the stresses in the metals market that led platinum to skyrocket may soon be echoed in silver, painting a picture of a system approaching its limit.
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