The recent surge in silver prices (especially the wave in late December 2025) is a "perfect storm" composed of intensified geopolitical crises, expectations of loose macroeconomic policies, and supply-demand imbalances.

As of December 27, 2025, silver prices have broken historical records (some trading platforms show surpassing $75-$77/ounce), with an increase of over 140% year-to-date, outperforming gold by a wide margin.
Below are the core reasons behind the recent (particularly since mid to late December) sharp rise:
1. Immediate Trigger: Escalation of US-Venezuela Geopolitical Crisis (mid to late December)
This is the most direct catalyst recently. Tensions between the US and Venezuela sharply escalated around Christmas, triggering a surge in market risk aversion:
* Maritime Blockade: Around December 17, the US announced a "maritime blockade" (or isolation) of sanctioned Venezuelan oil tankers, and in the following days (December 20-22) intercepted several oil tankers (such as the "Skipper" and "Centuries").
* War Risk Pricing: Markets worry that this conflict could escalate into broader military confrontation or disrupt the oil supply chain, causing a rush of funds into precious metals for safe-haven purposes. Silver, being more volatile than gold, tends to see amplified gains under such panic sentiment.
2. Macro Boost: Federal Reserve Rate Cut Expectations and Dollar Weakening
Despite being year-end, market bets on monetary policy in 2026 are very aggressive:
* Rate Cut Expectations: The market generally expects the Federal Reserve to continue cutting rates in 2026, possibly adopting more aggressive easing policies. The low-interest environment greatly benefits silver, which does not generate interest.
* Dollar Weakness: Influenced by rate cut expectations and geopolitical tensions, the US dollar index weakened in late December, making dollar-priced silver more attractive to global buyers.
3. Fundamental Support: Industrial Demand and the "Shortage" Narrative
This is not short-term speculation but a long-term supply-demand contradiction that was triggered at year-end:
* Photovoltaic and AI Demand: 2025 is dubbed the breakout year for photovoltaics and AI hardware (data centers), both heavily reliant on silver (especially photovoltaic silver paste). Industrial demand has continuously drained surface inventories.
* Supply Deficit: Throughout 2025, the silver market experienced severe supply shortages. As year-end inventory data further tightened, industrial buyers and speculators worried about "supply disruptions" began to rush in.
4. Market Sentiment: Short Covering and Price Rebound Effects
* "Gold/Silver Ratio" Reversion: Most of the year, gold led the rally, but by year-end, market funds started flowing into relatively "cheap" silver for a rebound. The Gold/Silver Ratio rapidly narrowed, indicating silver's price was rising much faster than gold.
* Holiday Liquidity: Late December coincides with Christmas holidays in Europe and America, when market liquidity is thin. Major positive shocks (such as geopolitical conflicts) at this time often cause sudden and intense price fluctuations (known as "long holiday short squeeze"行情).
Summary:
This rally was triggered by the US maritime blockade of Venezuela causing panic, combined with expectations of rate cuts in 2026 and already tight industrial inventories, leading to a historic "short squeeze" surge in silver at year-end.