Gold and Silver Prices Slip as CME Group Raises Precious-Metals Margins

 


Gold and Silver Prices Slip as CME Group Raises Precious-Metals Margins

New York, Dec. 31, 2025 — Gold and silver prices eased on the final trading day of 2025 after the CME Group raised margin requirements on futures contracts for precious metals, a move aimed at curbing volatility but one that also pressured leveraged traders and weighed on market sentiment.

Margin Hike Sparks Year-End Slide

The Chicago Mercantile Exchange, one of the world’s largest commodity trading platforms, announced an increase in margin requirements on futures for gold, silver, platinum and palladium following a period of sharp price swings and reduced liquidity typical of year-end trading. Higher margins mean traders must post additional capital to maintain positions, prompting some to reduce risk and trim holdings.

On Wednesday morning, spot gold was down about 0.8%, at approximately $4,313 per ounce, marking a retreat from recent multi-week highs, while spot silver tumbled more than 6%, trading near $71¾ per ounce after briefly topping $80 earlier in the week.

Record Rally Meets Profit-Taking

The declines followed a historic annual rally for both metals. In 2025, gold prices surged roughly 65%, on track for its strongest annual performance since 1979, buoyed by central bank buying, interest rate cuts, safe-haven demand and robust exchange-traded fund flows. Silver dramatically outpaced gold, more than doubling in value and poised for its best year since the 1970s, driven by industrial demand and supply constraints.

With investors booking profits after these exceptional gains, the margin increase added mechanical selling pressure to an already stretched market.

Volatility and Market Mechanics

Exchanges such as the CME periodically adjust margin requirements based on market volatility to ensure traders have adequate liquidity to cover potential losses. During the recent run-up, sharp intraday swings — especially in silver — prompted these adjustments, including a second hike in less than a week.

Analysts note that rising margins can trigger forced position reductions, particularly among leveraged speculative accounts, as traders unwilling or unable to post extra collateral liquidate futures positions to avoid margin calls. This dynamic contributed to the downward moves seen late in the year.

Broader Market Impact and Outlook

The retreat in precious-metals prices rippled into related markets, including mining stocks, which had participated strongly in the annual rally. While short-term volatility has increased, many market observers view the moves as technical and liquidity-driven rather than reflective of a reversal in the underlying long-term demand or supply fundamentals that supported metals throughout 2025.

As markets transition into 2026, focus will remain on how evolving monetary policy, geopolitical tensions and industrial demand — particularly for silver used in solar panels, electronics and EV production — shape precious metals’ trajectories.

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