Editor’s Note
This article highlights silver’s heightened sensitivity to reduced Asian market activity during the Lunar New Year period, contrasting it with gold’s more resilient and geographically diversified demand profile.
Silver prices have been swinging between gains and losses this week as thin trade conditions, triggered by the closure of key Asian markets for the Lunar New Year, drained liquidity from global bullion trading.
Unlike gold, which enjoys diversified demand across geographies and investor classes, silver is far more exposed to disruptions in Asian participation, particularly from China.
The Lunar New Year holidays have shut down several major Asian financial and commodity hubs, sharply limiting participation in precious metals trading. Mainland China, Hong Kong, Singapore, Taiwan and South Korea stock markets are closed for the festivities. In China, the Shanghai Stock Exchange and the Shenzhen Stock Exchange are closed from February 16 to February 23, with trading scheduled to resume on February 24. Hong Kong operated a half-day session on February 16, before remaining shut from February 17 to February 19, and reopening on February 20. These closures remove a critical source of liquidity from global metals markets.
Chinese exchanges, particularly the Shanghai Gold Exchange (SGE), have become increasingly influential in precious metals price discovery, alongside Western benchmarks such as COMEX. When these markets go offline simultaneously, global trading volumes thin significantly, widening bid-ask spreads and amplifying price volatility.