Silver Prices See-Saw Amid Lunar New Year Holidays

Silver prices are swinging wildly due to thin trading. This is because key Asian markets are closed for the Lunar New Year.

The Lunar New Year holidays have shut down several major Asian financial and commodity hubs. This has sharply limited participation in precious metals trading. Mainland China, Hong Kong, Singapore, Taiwan, and South Korea stock markets are closed for the festivities.

Impact of Lunar New Year on Silver Prices

The closure of these markets removes a critical source of liquidity from global metals markets. Chinese exchanges have become increasingly influential in precious metals price discovery. When these markets go offline simultaneously, global trading volumes thin significantly. This widens bid-ask spreads and amplifies price volatility.

Aamir Makda, a commodity analyst, explained that the week-long closure of major hubs creates a significant 'liquidity vacuum' in the global bullion market. As the world's largest physical buyers go offline, trading volumes thin out. This often results in exaggerated price volatility and wider bid-ask spreads.

Why Silver is Hit Harder than Gold

Silver's heightened vulnerability during the Lunar New Year holidays stems from its dual role as both a precious and an industrial metal. A much larger share of global silver demand is tied to industrial activity. China is the world's largest consumer of silver for industrial applications.

When Chinese factories slow or temporarily halt production for the holidays, demand for silver drops sharply. This can lead to a decline in silver prices. Gold, by contrast, is driven primarily by investment demand, central-bank buying, and safe-haven flows. These remain active even when Asian markets are shut.

Market Structure and Silver Prices

Silver's market is smaller and less liquid than gold's, making it more susceptible to sudden shifts in sentiment. When Chinese participation disappears, price discovery becomes concentrated in Western markets. In these conditions, speculative positioning, algorithmic trading, and currency movements tend to dominate. This often exaggerates price swings.

Silver Rate Today and Near-Term Outlook

After declining in early trade, silver prices rebounded more than 1%, supported by persistent geopolitical tensions. Investors are also closely assessing the future path of U.S. monetary policy. Spot silver rose 1.5% to $78.36 per ounce, after surging more than 5% on Wednesday.

Technical Perspective

From a technical perspective, analysts expect choppy trading to persist. Silver is now moving toward key resistance levels at $85 and $90. Given the heightened volatility, a buy-on-dips and sell-on-rallies strategy is recommended within the current trading range.

Looking Ahead

As liquidity gradually returns once Asian markets reopen, traders will be watching closely to see whether silver regains stability. Or will fresh macro triggers once again take control of price action? The coming days will be crucial in determining the direction of silver prices.