Silver prices topped $80 an ounce on Monday, but then dropped below $75 an ounce as the US-based CME group’s new regulations were set to come into force later in the day.
In India, silver future contracts on MCX topped ₹2.5 lakh a kg but then fell in line with the global cues. Reacting to the silver market’s behaviour, an analyst warned on social media that a “crazy week” is ahead for the white precious metal.
On December 26, the CME Group, which operates major derivatives exchanges such as CME, COMEX, CBOT and NYMEX, announced it was imposing a $25,000 initial margin for all futures contracts from $22,000 for silver for non-speculative accounts. For speculative accounts, the initial margin is $27,500 against $22,000.
Maintenance fee hike
The CME also raised the maintenance fee (for holding positions) to $25,000 from $22,000. The higher initial margin and maintenance fee will come into force after the close of trade on Monday.
The announcement for the CME’s new regulations was made late on Friday, leading to the market absorbing the shock on Monday.
Silver March futures on COMEX swung over 12 per cent on either rise, rising to a record high of $82.615 before dropping to $71.4. At 2000 IST, they traded at $72.475 an ounce. Silver spot prices were quoted at $72.75 an ounce.
On China’s Shanghai Futures Exchange, silver March futures slipped to 17,723 a kg ($78.43 an ounce) in the evening trade. Earlier in the day, it rose as high as 19,998 yuan ($88.50).
Analysts hope for recovery
On the MCX, the March silver contracts hit a high of ₹2,54,174 a kg before declining to ₹2,26.700 by mid-evening session. In the Mumbai market, silver PM prices slid to ₹2,35,440 a kg from ₹2,43,483 in the morning.
Despite the fall in silver prices, analysts said the silver-gold ratio will return to its historical average. Silver will return to its rightful place during the upcoming deglobalisation. “The experts who keep talking about 1980 and 2011 are looking at too short a time frame,” an analyst tweeted on “X”.
In China, the value of Beijing’s UBS SDIC Silver Futures Fund dropped by a maximum of 10 per cent, resulting in the fund manager calling it “unsustainable.”
In Chennai, Jithendra Vummidi, Managing Partner, Vummidi Bangaru Jewellers, said predictions are that silver will rise further. “In August, September and October, we saw a 30 per cent increase in consumption,” he said.
‘Silver Thursday’
CME’s new norms have raised fears of “Silver Thursday”, which dragged silver prices by 50 per cent on a single day in 1970. Then silver soared to $50 from $2 an ounce. As COMEX stepped in by raising the margins, it plunged 50 per cent in a day and nosedived to $10 in two months.
Similarly, in 2011, when silver hit $49.5 an ounce, the CME raised the margin five times within 10 days. It plunged prices by 30 per cent in a couple of weeks.
Traders said those who had gone short in silver (selling in anticipation of a fall) face delivery issues as they had no stocks, while industrial manufacturers are racing against supply chain chaos. Banks, too, were facing claims of delivery that are yet to be allocated by exchanges.
They said physical silver is not available for December delivery contracts, and big banks were buying all the available physical silver, pushing up prices.
Structural deficit
Vummidi said: “We, however, see a trend of clients who are buying gold and silver bars to safeguard against fluctuations in the economy caused by geopolitics,” he said.
According to traders, the Chinese curbs on silver exports from January have begun to play out in the market. In addition, for every ounce of physical silver available in the market, over 300 ounces have been sold.
Silver’s current phenomenal run is being attributed to geopolitical crisis, lack of confidence in the dollar, tariff war and concerns over the global economy. In addition, the market has been facing a physical deficit since 2020, with a lack of new investments in the mining sector.
(With inputs from T E Raja Simhan, Chennai, and Suresh Iyengar, Mumbai)
Published on December 29, 2025
