Silver, after climbing to a record high of $84 per ounce on Monday, posted its sharpest one-day drop since February 2021, sliding 7.18 percent on Tuesday as major exchanges raised margin requirements and investors locked in profits.
The metal had been breaking records consecutively last week, but easing geopolitical tensions and the London Metal Exchange’s adjustment to margin rules sparked a steep sell-off.
Silver opened the year at $28.9 per ounce and followed a strong upward trajectory, driven largely by US President Donald Trump’s tariff policies, uncertainty surrounding central banks’ easing paths, and geopolitical factors.
Prices rose about 25 percent in the first half of the year, surpassing $50 per ounce for the first time on Oct. 9. Robust central bank buying of precious metals, increased inflows into exchange-traded funds (ETFs), and growing expectations of monetary easing by the Federal Reserve supported the rally.
Silver climbed to $79.3 per ounce on Dec. 26 and hit $84 on Monday, marking a gain of more than 150 percent since the start of the year. Physical silver prices in China were reportedly as high as $90 per ounce.
The metal fell 7.18 percent to close Monday at $72.8 per ounce. The largest single-day decline on record remains the 8.21 percent drop on Feb. 2, 2021.
News that the Chicago Mercantile Exchange had raised margin requirements for silver futures also weighed on prices.
Following Monday’s steep fall, silver pared some losses on Tuesday, rising 2.4 percent to trade around $74.6 per ounce.
Zafer Ergezen, a futures and commodities markets specialist, told Anadolu that the sell-off was likely driven in part by the London Metal Exchange’s margin hike, noting that silver has seen similar declines of up to 10 percent in previous periods.
“A comparable price move is likely now,” he said. “After the decision, profit-taking was expected due to margin calls and the reassessment of positions.”
Ergezen added that silver’s rapid ascent made a technical correction unavoidable.
“When the need for correction is combined with profit-taking, a sharp decline emerges — this was not unexpected,” he said. “What matters for the next direction is whether buyers step in quickly and how long these position adjustments persist.”
He also noted price discrepancies between US and Chinese markets, citing China’s recent introduction of several silver export regulations.
“Regulators worldwide are trying to exert some control over this market, and China’s measures effectively pushed margins higher,” he said. “Strong demand for physical silver, which is currently facing supply shortages, led to a slight margin increase,” he added, emphasizing that physical demand was particularly strong in the Asia-Pacific region.
“The growing output of electric vehicles, renewable energy projects, and technology products has also boosted demand for silver, along with platinum and palladium, which explains the somewhat wider margins we’re seeing,” he said.
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