New Delhi, Oct. 16 -- The silver squeeze, which got underway last week amid surging investment demand for silver exchange traded funds (ETFs) and physical bars and coins, could begin easing after Diwali, said trade officials. They warned that this may hurt investors who recently entered the white metal counter with high hopes. Diwali festivities run from 18-23 October.

Currently, domestic silver futures are trading at a 7-8% discount to spot prices, reflecting an inverted market-where spot trades higher than futures rather than the other way around. This anomaly could reverse when supplies pick up, potentially causing sharp losses for investors who entered the market this month lured by quick gains, analysts said.

Tradesmen cautioned in...