Silver Lease Rates Surge as Gold Halves Recent Price Crash
February 6, 2026 – Precious metals markets witnessed notable volatility this week, as silver lease rates jumped sharply amid a substantial recovery in gold prices following last week’s steep declines. The contrasting movements signal tightening supply-demand dynamics in global bullion trading hubs, particularly London.
Gold Recovers Nearly Half of Its Plunge
On Friday, gold prices rebounded strongly, erasing 45.9% of the $1,190 collapse that began Monday night after hitting record highs close to $5,600 per troy ounce just the previous Thursday. Trading settled back around $4,950 per ounce – a significant recovery considering the fresh all-time highs recorded just two weeks earlier.
This recovery comes alongside gains seen in Bitcoin, key base metals, and U.S. technology stocks, while the U.S. Dollar took a pause after recent rallies on the currency markets.
Silver Prices Remain Below Peak but Show Tight Physical Supply
Silver’s price story was more complex. Despite remaining 37.5% below last Thursday’s all-time high of $121 per ounce, silver bullion traded in London at $76.65 per ounce on Friday — a premium to New York Comex futures, even extending into July contracts. This premium and the simultaneous surge in London silver lease rates to 6.3% annualized for one-month loans underscore a tight physical bullion market with constrained availability amid investor bargain hunting.
Though these lease rates are below the highs experienced during the October 2025 silver squeeze, they approach levels last seen during 2025’s dislocation when London banks and traders shipped silver to New York ahead of fears about U.S. trade tariffs targeting metal imports.
Market Experts Weigh In
Former Tokyo trader and current head of the Japan Bullion Market Association, Bruce Ikemizu, suggested, “It seems likely that the bottom is approaching” for precious metals following recent corrections.
Meanwhile, a Financial Times editorial reflected on the broader financial context, noting: “The precious metals mania is just one extreme area of excess in the financial system,” with spectacular gains across cryptocurrency and AI-driven stock market booms serving as potential warning signs.
Broader Market Movements and Influences
U.S. technology stocks closed at a near five-month trough Thursday, down 12.7% from their October 2025 peaks, before rebounding 2.8% Friday morning. Bitcoin hit a 15-month low near $60,000 late Thursday then surged nearly 10% in Friday trading.
Copper and nickel metals also bounced from recent lows but overall showed substantial weekly losses, with copper marked by its worst weekly fall since April 2025. The nomination of Kevin Warsh by President Trump last week for the U.S. Federal Reserve leadership contributed to market stabilization. Warsh, a former Fed governor, was seen as an orthodox choice relative to other candidates, easing some uncertainty. European Central Bank President Christine Lagarde noted her longstanding professional relationship with Warsh and welcomed the nomination following the ECB’s decision to hold Eurozone interest rates steady.
Currency and ETF Activity
On currency markets, the U.S. Dollar index (DXY) slipped marginally on Friday following a 1.7% rally earlier in the week from a four-year low last Thursday.
Silver’s giant ETF, the iShares Silver Trust (NYSEArca: SLV), saw a sharp 0.8% selloff on Thursday as some shareholders exited positions. Despite this contraction, the fund still expanded over the week by 4.7%, adding 724 tonnes of silver – marking the largest weekly inflow since the January 2021 #silversqueeze event catalyzed by social media trading frenzy.
Derivatives specialist Ole Hansen of Saxo Bank commented, “Interest in call options has continued to build even as prices fell, indicating many traders remain bullish. Any sharp rebound could trigger a repeat rally as option sellers buy ETFs or futures to hedge.”
Seasonal Factors and Outlook
Silver prices rebounded above $10 per ounce from a seven-week low but remained below $75 per troy ounce at London’s midday auction, the lowest benchmark since early 2026. Weekly, silver dropped 27.5% between last Friday and Friday noon, its steepest decline since the 29.8% fall following the Easter 2011 touching of January 1980’s record near $50. China, the world’s largest consumer of silver and gold, is preparing for its week-long Lunar New Year shutdown starting next Friday. MKS Pamp strategist Nicky Shiels noted, “Seasonal trends and data suggest one can’t be short precious metals when China, the global price setter, is closed for its most important holiday. However, the absence of Chinese market participants for ten days could also exacerbate volatility in an already liquidity-constrained market.”
About the Author:
Adrian Ash is Director of Research at BullionVault, a leading online platform for physical precious metal investment. With over 20 years of experience covering bullion markets and global finance, Adrian is a recognized commentator frequently cited by mainstream media, including the Financial Times and Bloomberg.
Disclaimer: This article is for informational purposes only and should not be taken as financial advice. Investors should conduct their own research and consult with professional advisors before making investment decisions.