Silver prices surged by 5%

According to the SunSirs' commodity market analysis system, the average price of silver on December 10, 2025, was 14,319 RMB/kg, a daily increase of 4.95%. This represents a 6.75% increase compared to the average price of silver at the beginning of the month (December 1st), which was 13,414 RMB/kg; and a 92.20% increase compared to the average price at the beginning of the year (January 1st), which was 7,450 RMB/kg.

On December 10, 2025, the Shanghai Gold Exchange's benchmark price for Shanghai Silver (silver ingots with a standard weight of 15 kilograms and a purity of no less than 99.99%, priced under a futures contract) was 14,318 RMB/kg at midday, an increase of 739 RMB/kg compared to the previous trading day's midday benchmark price of 13,579 RMB/kg.

On December 10th, both the futures and spot prices of silver continued to reach new highs. London spot silver rose by nearly 1%, while the main contract for Shanghai silver futures saw a single-day increase of as much as 5.27%.

Multiple factors were converging to support a surge in silver prices

This significant price increase was the result of a confluence of factors, including industrial demand, supply and demand dynamics, financial policies, and capital inflows. The specific reasons were as follows:

1. The surge in industrial demand provided strong support:

Industrial demand accounts for 65% of silver consumption, becoming the dominant force in price determination. The photovoltaic industry was the core source of this increased demand; global silver consumption in the solar industry was double by 2025 compared to 2022. The widespread adoption of N-type solar cells was further increasing the amount of silver used per gigawatt. In the fourth quarter, global solar companies increased orders to prepare for 2026, leading to a significant surge in silver demand in November and December. Simultaneously, orders for AI computing servers and data centers remained strong, with each server rack consuming significantly more silver than traditional equipment. Furthermore, electric vehicles use far more silver per vehicle than traditional internal combustion engine vehicles. These high-growth sectors were collectively driving up industrial demand for silver.

2. The contradiction between tight supply and inventory shortage had intensified:

The global silver market experienced a supply deficit for five consecutive years, with the supply gap projected to reach 95 million ounces in 2025. On the supply side, 70-80% of silver is a byproduct of other metals such as copper and lead. Expansion of primary mines was slow, and production in major producing regions like Mexico and Peru fell short of expectations in the fourth quarter. Mexico was also planning to increase export tariffs, further restricting supply. In terms of inventories, LBMA silver stocks had decreased by one-third from their 2022 peak, and Shanghai Futures Exchange inventories had also fallen to a nearly 10-year low. Global exchange inventories are only sufficient to support 3-9 months of consumption, and the tight supply of readily available silver continues to drive up prices.

3. Expectations of a Federal Reserve interest rate cut activated the financial aspects of the market:

According to CME's "FedWatch," the probability of the Federal Reserve cutting interest rates by 25 basis points in December is as high as 87.6%. An interest rate cut would lower the opportunity cost of holding non-interest-bearing assets like silver, while also suppressing the dollar. Since silver is priced in U.S. dollars and is highly sensitive to dollar fluctuations, a weaker dollar would increase the investment appeal of silver. Furthermore, the potential next Federal Reserve chairman holds a dovish stance, and the market expects multiple interest rate cuts in 2026. This sustained expectation of monetary easing further strengthens the financial support for silver.

4. A large influx of investment capital was fueling the price increase:

Silver prices are significantly lower than gold, attracting many investors seeking low-cost safe-haven assets. Position data shows that COMEX silver non-commercial net long positions reached a historical high, and the world's largest silver ETF increased its holdings by over 500 tons in six months; in the domestic market, silver T+D trading volume increased by 30% in six months, and speculative long positions increased by 12% in a single month. At the same time, the gold-to-silver ratio fell to around 72, which, although still higher than the long-term average, indicates a trend of price correction that is prompting funds to shift from gold to silver at an accelerated pace, creating a positive feedback loop for price increases.

5. Macroeconomic risk aversion provided additional impetus:

The major Western economies were experiencing rising debt levels, the US national debt was at a record high, and geopolitical risks such as the ongoing conflict in the Middle East were impacting the global fiat currency system. Investors were increasing their allocation to precious metals to hedge against currency devaluation and economic volatility. Silver, in particular, is attractive due to its combination of safe-haven properties and price advantages.

Market Forecast: The long-term trend is positive, but be wary of pullbacks and high volatility in the short term

On December 10th, silver prices reached a new historical high, having increased by over 92% since the beginning of the year (January 1st), nearly doubling. In the short term, silver prices may face risks of high-level volatility and correction, but in the medium to long term, the silver is likely to maintain an upward trend due to fundamental support.

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