Silver didn’t just have a good year. It went full main character mode. It crushed most assets, grabbed headlines, and somehow became the third most valuable asset on the planet. Then China stepped in and said, “Actually… we’re not selling.”
That’s when things got spicy.
So let’s zoom out. Because this isn’t just about silver prices going brrr 📈. This is about money, power, control, and a slow-moving chess game between China and the US that most people aren’t paying attention to yet.
First, gold and silver are not the same thing
Gold is about trust.
Silver is about control.
Gold backs money. It signals stability. It whispers, “You can trust this system.” That’s why China has been hoarding gold for decades, building the Shanghai Gold Exchange, and expanding what people call the “gold corridor.”
The message is simple:
If you want a money system outside the US dollar, here’s an option. Gold-backed. Basel III compliant. Use it as collateral. Build your economy. No Fed required.
Silver, on the other hand, doesn’t care about vibes or trust.
Silver runs the modern world.
Solar panels. EVs. Data centres. Military tech. Satellites. AI. Robotics. Automation.
Basically, if it needs electricity and precision, it needs silver.
And here’s the kicker.
When silver gets expensive, industries don’t stop buying it. They can’t. They need it to function. That alone makes silver very different from gold.
So how do we even know what silver is “worth”?
Welcome to price discovery.
Globally, two markets matter:
- COMEX (US-based, futures-heavy, paper-driven)
- Shanghai (physical delivery, real metal, no funny business)
COMEX prices mostly reflect paper contracts. Most of them never result in actual silver delivery. They get rolled over or settled in cash. Easy, convenient, very Wall Street.
Shanghai prices reflect real silver. Stored. Delivered. Used by manufacturers.
Normally, these two prices stay close. If one gets too cheap, traders buy there and sell where it’s expensive. That’s arbitrage. Prices snap back together. Balance restored.
Except… recently, they didn’t.
The gap that shouldn’t exist (but does)
On December 24, physical silver in Shanghai closed around $78 an ounce.
At the same time, COMEX silver closed around $72.
A $6 gap.
That’s huge. Historically weird. Almost unheard of.
Usually, the difference is less than $1. Rarely more than $2. When a $5–$6 gap sticks around, especially during a quiet holiday period, it’s a signal.
Something is off.
It suggests physical silver isn’t moving freely anymore.
And when physical supply tightens, paper prices eventually get dragged higher whether they like it or not.
A quick problem with COMEX inventories
Inside COMEX-approved vaults, silver is split into two buckets:
- Eligible silver: stored, not for sale
- Registered silver: available for delivery
Here’s the issue.
Registered silver sits around 120–130 million ounces.
Global annual demand?
About 1.1 to 1.2 billion ounces.
Do the math. If everyone asked for physical delivery at the same time, COMEX wouldn’t even come close. But it works… as long as people don’t ask for the silver.
That’s fine. Until behaviour changes.
Why China understands silver better than anyone
Historically, silver wasn’t just a metal in China.
It was money.
Taxes were paid in silver. Trade was settled in silver. Big deals were weighed, not priced. For centuries, silver stabilised China’s economy.
Then came 1934.
The US passed the Silver Purchase Act, forcing massive silver buying. Prices shot up. Silver flowed out of China. Money drained. Deflation kicked in. Spending stopped. Investment froze.
The economy slowly ate itself.
By 1935, China abandoned the silver standard.
Not because silver failed.
But because China learned a brutal lesson:
If your economy depends on something you don’t control, someone else will weaponise it.
China did not forget that.
What China just did (and why it’s clever)
China didn’t ban silver. That would cause drama. Headlines. Angry politicians.
Instead, they reclassified silver as a dual-use strategic material.
Civilian + military.
That changes everything.
Now, silver exports require government approval. On paper, it looks harmless. In reality, almost nobody qualifies. Only big players. And even then, approvals are discretionary.
Translation?
China didn’t close the door.
They installed a gate. And they control the keys.
Why this matters even more than you think
Most silver isn’t mined directly.
About 70–80% comes as a byproduct of mining copper, lead, or zinc.
So even if silver prices double, supply doesn’t magically increase. You’d need more base metal mining. That takes years.
Economists call this inelastic supply.
Think insulin, not coffee.
People don’t just stop using it because the price goes up.
Now add this:
A huge chunk of global silver refining happens in China. Even silver mined in Mexico or Australia often passes through Chinese processing before it’s usable.
From January 1, 2026, China decides if that silver leaves.
Sound familiar?
They did this before with rare earths.
Same playbook. Same outcome. Panic first. Then a decade-long scramble to rebuild supply chains.
Silver is next. Except silver is everywhere.
So… where does silver go from here?
Honestly? Nobody knows.
Silver has a weird personality. It does nothing for years. Then it moves fast. Violently fast.
In the late 1970s, it went from around $6 to over $50 in just over a year. Then it crashed. Then it slept again.
That’s silver.
When supply tightens, prices spike.
Then speculators rush in.
Then they take profit.
Then prices fall hard.
Are we early? Late? Somewhere in the messy middle?
No idea.
What matters more is this:
This isn’t really a silver story.
This is a power story.
China isn’t trying to win by shouting. They’re winning by controlling chokepoints.
Gold builds trust.
Silver builds leverage.
Control refining.
Control exports.
Control who builds and who waits.
In a world drifting away from cooperation and into competition, leverage is currency. And we’re moving fast into a multipolar world where no single country makes all the rules anymore.
Silver might look like a small domino.
But it’s connected to energy, tech, defence, AI, and money.
That’s not small. That’s structural.
So whether silver hits $100 or drops back to $50 isn’t the point.
The point is this: the game has changed. And silver just showed us who’s been studying the board the longest.
