Surging silver and gold slide after exchange raises margin requirements

Silver and gold futures fell sharply on Monday after the Chicago Mercantile Exchange (CME), one of the world’s largest trading floors for commodities, asked traders to put up more cash to make bets on precious metals with prices surging this year.

This year, gold futures are up 65 per cent and silver has more than doubled.

The CME raised margin requirements for gold, silver and other metals in a notice posted to the exchange’s website on Friday. These notices require traders to put up more cash on their bets in order to insure against the possibility that the trader will default when they take delivery of the contract.

Exchanges sometimes boost margin requirements when a commodity or other security goes on a significant run. In its notice, the CME said it was raising margin requirements “per the normal review of market volatility”.

Silver futures tumbled 8.0 per cent early Monday, while gold slid 5.0 per cent. Silver prices have skyrocketed this year, topping records dating back to the early 1980s, when traders tried and failed to corner the silver market. Supplies have dwindled, with production at major mines slowing. At the same time, there’s been an increased industrial need for silver for solar panels, as well as data centres. Silver futures were roughly US$30 an ounce at the beginning of 2025, and briefly touched US$80 an ounce before the CME’s announcement.

Gold futures have risen due, in part, to geopolitical uncertainty and fears that a bubble is forming in some stock markets.

The new requirements for traders dragged down almost all major goldminers as well on Monday. Newmont, the world’s largest goldminer, was the biggest decliner on the S&P 500, falling 6.0 per cent. Smaller goldminers like Vista, Anglogold and Gold Fields fell even more sharply.

AP