Silver price closes in on 14-year high

Silver rose to the highest in almost 14 years as investors sought alternatives to a near-record gold price, with increased demand leading to tighter physical supply.

- YIHUI XIE SYBILLA GROSS

Spot silver rose as much as 1.8%, following last week's 4% increase. The implied cost of borrowing the precious metal for one month spiked to above 6%, compared with its typical rate of nearly zero.

The rise in appetite for the metal has left the physical market under strain in London, where most silver is held by exchange-traded funds — meaning it is not available to lend or buy. Since February, the volume of silver-backed ETFs has expanded by about 2,550 tonnes, according to Bloomberg calculations.