Silver prices raced to a historic high of over $83 per ounce on Monday before tumbling as much as 13% in a swift correction driven by profit-taking, reduced geopolitical risks and tougher rules that rattled world commodities markets.
Spot silver reached an all-time high of $83.62 per ounce in early Dec 29 trading before dropping to just over $75 by the afternoon, various market reports said. Even after the steep pullback, silver is still up roughly 180% for the year, its best annual performance since 1979, easily outpacing gold’s gain of nearly 70%.
The reversal came just a day after President Donald Trump held an impromptu meeting with Ukrainian President Volodymyr Zelenskyy at Mar-a-Lago on December 28. Both leaders said a peace agreement to end the Russia-Ukraine war was near. Zelenskyy told an interviewer that a 20-point peace plan was “90 per cent agreed” to, and U.S. security guarantees were “100 per cent” agreed to, which would reduce demand for safe-haven assets like silver and gold.
Multiple Headwinds Trigger Correction
The selloff intensified after CME Group announced a margin requirement increase on silver futures from $20,000 to $25,000 per contract effective Dec. 29. The decision, was made public on Dec. 26 during extraordinary market swings, demanding that traders post more collateral and contributing to heavy forced selling by leveraged investors.
And to make extra market pressure on top of that, China said it would begin restricting exports of silver starting January 1, 2026. The new rules will restrict exports until 2027 to state-approved producers that produce at least 80 tons a year. Tesla CEO Elon Musk said, “This isn’t good,” and noted that “silver is used in a lot of industrial processes.”
In India, silver futures on the Multi-Commodity Exchange surged to a record ₹2,53,280 per kilogram then fell 8-10% across different contract months. Gold futures, which had been within a stone’s throw of all-time highs, eased about 2% and copper retreated 13% from record levels.
Mining Stocks Whipsaw on Volatility
Indian mining companies saw big intraday swings. A 67% rally in Hindustan Copper in December to a 15-year high of ₹546 was squandered by afternoon today. Hindustan Zinc, which derives about 40% of its profits from silver, also gave up earlier gains even after silver’s high value contribution to earnings.
Silver’s rally has been underpinned by a fifth consecutive year of supply shortages, with world demand surpassing supply approximately by 300-500 million ounces in 2025 (investment inflows included). Meanwhile, industrial demand from solar panels, electric vehicles and electronics is still climbing while mine output tries to catch up. Total demand rose to about 1.14 billion ounces in 2025 from a supply of 1.03 billion ounces, according to the Silver Institute.
Analysts are still bullish on the outlook for silver’s long-term, even after Monday’s retreat. “The silver market in 2025 is in a strong bull phase, as physical deficit extends while inventories continue to decline and policy-induced production constraints persist,” said Navneet Damani, head of commodities research at Motilal Oswal Financial Services.
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