Precious metals markets sent a clear signal on Christmas Day, when silver prices in China soared to local records, while Bitcoin traded with minimal volatility amid low holiday liquidity. The key drivers of silver price growth were a severe shortage of physical commodities and strong industrial demand.

Physical Silver Shortage in China as a Growth Driver

The momentum for silver prices originated in China, where local prices reached historic highs on December 25. The country faced a severe shortage of physical metal, leading to a sharp price increase. Globally, the spot price of silver is holding near $72 per ounce, and the asset has risen more than 120% since the beginning of 2025. Meanwhile, gold has also shown strong growth, adding nearly 60% year-over-year.

Comparison with Bitcoin

Unlike silver, Bitcoin ended December down after peaking above $120,000 in October. This divergence highlights an important macroeconomic trend: during periods of resource scarcity and geopolitical stress, capital flocks to hard assets, ignoring digital alternatives. Bitcoin's stagnation and lack of defensive features in volatile conditions make it less attractive to investors.

Global and Local Demand Factors

China's spot and futures markets are trading at a consistent premium to London and New York (COMEX) benchmarks. A number of contracts briefly experienced backwardation, a sign of immediate supply stress. China accounts for more than half of global industrial silver demand, and local shortages are becoming a global concern.

The silver market is under pressure from several sources. The primary driver remains solar panel production, which requires significant volumes of silver. Furthermore, the growing production of electric vehicles is also increasing demand for this metal. Each electric car requires significantly more silver than a traditional internal combustion engine vehicle, particularly in power electronics and charging infrastructure. Grid expansion and electronics manufacturing also support high silver demand.

In Conclusion

Thus, the current situation in the silver market in China highlights the importance of hard assets in an environment of economic instability. While Bitcoin faces challenges and stagnation, silver continues to demonstrate growth, making it attractive to investors seeking reliable capital preservation. With physical commodities in short supply and industrial demand growing, silver could become a key asset in investor portfolios in the coming years.