Silver reserves in London vaults rise 6.8% in October, says LBMA

LONDON, Nov 7 (Reuters) - Silver held in London vaults rose to 26,255 metric tons, valued at $41.3 billion, at the end of October, up 6.8% from a month before, the London Bullion Market Association (LBMA) said.

Large flows of silver from the U.S. and China to London's spot market in October eased a liquidity squeeze in the world's largest over-the-counter precious metals trading hub, traders and analysts told Reuters last month.

With October's inflows of 1,674 tons to the London vaults, short-term silver borrowing rates in London eased from record highs seen in the first half of October, although they are still historically elevated.

London's vaults store both allocated silver, which is "spoken for" by silver-backed exchange-traded funds, and unallocated metal, which can be borrowed.

The tightness in the London market in October coincided with surging gold prices and strong buying in India, driving spot silver prices XAG= to a record high of $54.5 per troy ounce on October 17. The metal was last trading at $48.6 on Friday.

Amid tight liquidity in London, about 1,568 tons of silver has left Comex warehouses in the U.S. SI-STX-COMEX since stocks there hit a record high of 16,543 tons (531.9 million troy ounces) on October 3.

However, Comex inventories are still up sharply year-on-year due to this year's uncertainty over U.S. import tariffs.

These worries persist with the market awaiting the results of the U.S. probe into critical minerals and its potential effect on the trade flows between New York, the world's largest futures market, and London, the world's largest physical market.

Silver is one of the critical minerals, according to the updated list released by the U.S. Geological Survey on Thursday.

"Should they be introduced, tariffs could have severe implications for global silver trading and hedging," said Julius Baer analyst Carsten Menke.