Silver’s Squeeze: Why $50+ Silver Is Repricing the Bullion Market and Pulling Crypto Along With It

After lagging gold for much of 2024 through early 2025, silver has ripped to fresh record highs above $50/oz, with liquidity stress in London flipping the usual spot–futures relationship and igniting a full-blown physical squeeze. 

At the same time, premiums and stock-outs are back across U.S. retail, while analysts, including Bank of America, have lifted targets into the mid-$60s for the next year. 

Below, I unpack what’s changed, how the retail bullion market is coping, why some investors see silver as the smarter near-term trade than gold, and why a growing slice of crypto traders are hedging with metals.

What’s driving the squeeze (and why it matters)

• Acute tightness in London: Multiple sources report backwardation with London spot > COMEX futures by up to ~$3/oz, bid–ask spreads ballooning from ~3¢ to >20¢, and lease rates spiking (30%+ and even higher overnight prints)—classic markers of a deliverable-metal shortage rather than just speculative froth.

• Inventory drawdowns: LBMA vault holdings have fallen roughly a third from 2021 peaks, with “free float” (metal not tied to ETFs) markedly lower, making spot squeezes easier to trigger when investor or industrial demand jumps.

• Structural deficits: The market has run multi-year physical deficits—solar PV and electronics are the big secular drivers—shrinking above-ground liquidity just as investor demand returns at new highs.

• Logistics tell: Reports of air-freighting 1,000-oz bars from New York to London (usually only economical for gold) highlight how unusual the price dislocations have become.

Why it’s more than a headline: When spot trades over futures and borrowing costs scream higher, it’s a signal that immediate delivery is scarce. That reprices time value, lifts spot premiums across regions, and cascades into retail premiums and product availability.

The U.S. retail reality: premiums, product mix, and “what’s left to buy”

• American Silver Eagles (ASEs): Current-year ASE premiums are running roughly $5.14–$10.22/coin over spot; secondary-market ASEs are about $5.57–$8.73 over.

• Inventory constraints: Many dealers report “sold out”/back-order waves. Wholesalers are remelting large-format .999 fine into 1,000-oz bars for LBMA/COMEX delivery to capture wholesale spreads, diverting supply from the retail bar/round market.

• 90% U.S. silver (pre-1965): Wholesalers have warned retail shops they’re bidding ~50% below spot for 90% junk bags because refiners are capacity-constrained and prioritizing .999 fine into deliverable bars; up-refining 90% is a bottleneck right now.

• Translation for buyers: Expect elevated premiums, limited SKU choice, and gappy restocks, especially on popular sizes (10 oz, 100 oz) while the wholesale market clears.

Why silver may be the smarter short-term play than gold (with caveats)

• Elastic upside in squeezes: Silver’s market is smaller and thinner than gold’s. In a genuine deliverable squeeze, price can overshoot faster, which we’re seeing in the spot–futures kinks and lease rates.

• Industrial kicker: Unlike gold, silver’s bull case fuses monetary demand (store of value) with non-discretionary industrial pull (PV/EV/electronics). That mix supports dips and amplifies breakouts.

• Re-rating vs. gold: Gold’s already at records and widely owned; silver’s late-cycle catch-up gives it relative torque. (Risk flips the same way: silver can correct harder.)

• Street views: Bank of America just raised its silver target to ~$65 by 2026 while warning of volatility. Other market desks flag the “debasement trade”, flows rotating into gold, silver, and sometimes bitcoin when investors fear currency and fiscal dilution.

Risk reminder: Silver’s higher beta cuts both ways. Pullbacks after vertical moves can be sharp. Position sizing and liquidity planning matter more than ever.

Why more crypto traders are hedging with metals

• Different hedges for different shocks: Recent research highlights gold’s edge when equities break, while bitcoin sometimes offsets bond stress. Adding silver can hedge policy/FX debasement + industrial cycle in ways BTC doesn’t.

• Cross-flows and rotation: Big crypto run-ups often fund profit-taking into hard assets. Public voices (e.g., Peter Schiff et al.) keep stoking the “sell BTC for silver” meme—love it or hate it, it’s visible in the flows and social chatter.

• Tokenized rails: DeFi platforms and exchanges are introducing metals-linked products and tokenized silver pairs, which help crypto-native traders hedge in-ecosystem and reduce off-ramp friction.

• Risk management after the crypto “weekend wipeout”: The October liquidation cascade reminded speculators why uncorrelated ballast helps. Some are adding physical silver/gold to sit alongside BTC/ETH rather than choosing one “hedge king.”

Near Term Technical Analysis

• Trend & breakout: Spot silver decisively cleared the decade-long ceiling near $50, confirming a multi-year cup-and-handle structure that technicians have watched since the 2011 peak. A confirmed breakout above prior highs typically invites measured-move targeting; with such a long base, trend followers will stay constructive as long as price holds above the breakout zone on weekly closes.

• Levels & structure: On futures, traders flagged $52.50 as the next resistance pivot, with $51.00 and the record intraday highs as interim caps. On the downside, the levels of $49.00 and $48.00 are the first supports (recent pullback lows). A weekly close back inside the $50s keeps bulls in control; multiple closes below $48 would warn that the squeeze is easing and invite a test of mid-$40s high-volume nodes.

• Momentum & risk: Momentum gauges (RSI/MACD on daily/weekly) are likely overbought after a vertical leg, a normal condition in breakouts—but it raises gap-risk on headlines. The spot–futures backwardation and elevated lease rates signal real tightness but also volatility risk if logistics normalize (e.g., metal flown/shipped into London, ETF outflows freeing bars).

• Playbook implication: Trend-followers will buy dips into $49–$50 with tight risk and aim for $52.5+, mean-reversion traders will fade parabolic spikes intraday toward the 51–52 band if spreads relax, and long-horizon allocators are more likely to scale rather than chase, given premium blowouts in retail products. (None of this is advice—illustrative frameworks only.)

Practical guidance for U.S. bullion buyers (HCU-focused)

• Mind the premium, not just spot. A $1 move in spot price won’t help if you pay $8–$10 over on Eagles. Use FindBullionPrices.com to compare the all-in cost per ounce across coins, bars, and secondary market options.

• Be flexible on format. When 10-oz/100-oz retail bars go scarce, consider reputable private-mint bars, kilo bars, or secondary ASEs if spreads look fair.

• 90% silver caution. In this cycle, 90% of bags may underperform temporarily if wholesale bids remain significantly below spot prices due to refining constraints.

• Verify before you wire. Scams spike when metals run. Use established, trusted, and reputable dealers, compare posted inventory vs. ship times, and prefer insured payment rails.

• Storage & documentation. Keep invoices/serials, store them in inert materials (no PVC), and consider segregated vaulting if you’re accumulating a significant amount.

Key takeaways

• The silver squeeze is real, documented by spreads, lease rates, and logistics, not just price action.

• U.S. retail is feeling it via higher premiums and stock-outs; the wholesale machine is prioritizing deliverable .999 bars to London/COMEX.

• Near-term, silver may out-torque gold on upside (and downside), aided by industrial demand and a smaller float.

• Crypto investors are increasingly hedging with metals, not replacing them, different assets hedge different risks.

• Plan for volatility. Size positions prudently, and base decisions on all-in costs, not headlines.

Note: Figures like premiums, inventory strain, lease rates, and spread behavior reflect the most recent reporting in the pieces above; conditions can change quickly. Always re-check live quotes and dealer terms before transacting.