Silver Prices See V-Shaped Reversal During 2026 Chinese New Year, Driven by Global Factors and Trade Tensions

I. Overseas Market Trends: Macro and Geopolitical Factors Drive V-Shaped Reversal
During the 2026 Chinese New Year holiday (February 13–23), international silver prices were influenced by multiple factors, including US macroeconomic policies and geopolitical conflicts in the Middle East, showing a V-shaped trend of first declining and then rising. As of the close on February 23, the spot silver price in London was $88.17 per ounce, up 13.8% from the pre-holiday closing price of $77.46 per ounce on February 13.

The trend unfolded in two phases: Before the holiday, a decline in US stocks combined with shrinking market liquidity led overseas precious metals to continue falling in the early part of the week, with silver and platinum once falling below the 60-day moving average and gold dropping below the 20-day moving average. Subsequently, weaker-than-expected US Q4 GDP growth prompted a rebound in precious metals, halting the decline. On Friday, February 21, the US Supreme Court ruled to repeal most tariffs previously imposed by the Trump administration. However, Trump immediately announced an additional 10% tariff on all global imports to the US within the next 150 days, sparking market concerns over escalating trade friction and an economic slowdown. Coupled with the deadlock in US-Iran negotiations potentially worsening the situation in the Middle East, rising risk aversion drove a significant intraday surge in precious metals, with silver leading the gains and recovering all earlier losses.

II. Domestic Supply: Smelters Maintain Stable Production During the Holiday, Post-Holiday Destocking Accelerates
On the supply side, copper, lead, and zinc smelters maintained normal production during the 2026 Chinese New Year holiday, ensuring stable refined silver supply. Large-scale downstream processing enterprises, such as those producing silver nitrate and alloys, generally suspended operations for the holiday. Only a few small and medium-sized silver-based material, jewelry enterprises, and some industrial users with urgent orders remained operational. Holiday factors, combined with high silver prices and high premiums, led to a temporary overall stagnation in downstream consumption.

Although many smelters reported seasonal accumulation of in-factory inventory after the holiday, the destocking speed in 2026 was significantly faster than in previous years. Some manufacturers transferred in-factory inventory to social warehouses for delivery or sold directly at market premiums on the first trading day after the holiday. Smelter inventory levels are expected to gradually return to a safe range.

III. Downstream Demand: Investment Demand Recovers, Industrial Consumption Remains CautiousDemand side showed structural divergence. Investment demand side, although gold and silver import tariffs were exempted, the impact of policies on US dollar assets and the boost in safe-haven allocation demand both benefited gold and silver prices, and the market continued to reprice Trump's tariff policies. In the spot market, physical investment demand might trigger stockpiling buying again due to price increases; some downstream enterprises expected to purchase physical goods from the exchange after the delivery of SHFE's February contract, adopting a cautious wait-and-see attitude toward the current high premium quotes.

Industrial consumption side, the wild swings in silver prices in early 2026 and the liquidity pressure from hedging caused by the exchange's margin hike forced silver-containing material processing enterprises to face a dilemma: either take orders at the break-even point to maintain customer relationships, or halt production to cut losses. Although downstream enterprises resumed normal operations after the holiday, most industrial enterprises basically did not take on new orders during the holiday period. After the holiday, orders for silver nitrate and electronic and electrical intermediate processing products were expected to be weak, while spot transactions were mainly dominated by the rapid recovery of investment-type jewelry and silver bar processing. Industrial end-users showed low acceptance of the current high prices and high premiums, with cautious ordering willingness.

IV. Market Outlook

After the holiday, the precious metals market showed a pattern of localized hotness and overall sluggishness. In addition to continuing to focus on macro policy disturbances and geopolitical changes, two key factors need special attention this week: first, the changes in spot premiums after the delivery of SHFE's front-month contract; second, whether there will be renewed price anomaly risks against the backdrop of low overseas COMEX inventory levels.