Gold and silver prices slid sharply as turbulence hit precious metal markets, with silver suffering its steepest one-day fall since the Covid pandemic.
Spot silver dropped 11% on Monday to around $72 (£53.36) an ounce, after briefly surging to a fresh record high near $84 earlier in the session. The sell-off spilled over into gold, which fell to about $4,332 an ounce. Despite the drop, gold is still up roughly 65% this year, compared with silver’s far larger gains.
The sudden reversal followed an announcement by CME Group that it would raise margin requirements for silver futures, a move aimed at curbing risk in an increasingly volatile market. Higher margins can force traders to reduce positions, often amplifying price swings.
Monday’s volatility capped a remarkable year for silver, which has surged around 150% from below $30 at the start of 2025. Precious metals have been among the strongest-performing “safe haven” assets this year as investors sought protection from geopolitical tensions and market uncertainty.
Michael Haigh, global head of commodities research at Société Générale, said the extreme moves were exacerbated by thin year-end trading conditions. “These markets become much less liquid over the festive period,” he said, noting that silver’s market is roughly ten times smaller than gold’s, making prices far more sensitive to large trades.
The recent rally had been fuelled in part by China’s announcement that it would restrict silver exports, stoking supply fears. However, the sharp pullback has reignited concerns that prices may have moved too far, too fast.
Kathleen Brooks, an analyst at XTB, said: “There is undoubtedly a bubble in silver.” She added that speculative buying had driven a 28% rise over the past month alone, increasing volatility, though ongoing Chinese stockpiling could limit the downside.
Silver has also seen strong industrial demand, particularly from sectors such as solar energy, while central bank buying of metals as an alternative to dollar-based reserves has added further support. Even so, the latest sell-off highlights how fragile sentiment has become after an extraordinary run-up in prices.
