Tue Dec 30 04:20:00 UTC 2025: News Article:
Gold and Silver Prices Plunge After Record Highs, Sparking Market Jitters
New York, NY – Gold and silver markets experienced a dramatic reversal on Monday, with prices plummeting after hitting record highs. The sudden downturn has sent shockwaves through the precious metals sector, leaving investors on edge.
Gold futures (GC=F) fell 4.5% to just above $4,340 per troy ounce, while silver futures (SI=F) took an even steeper dive, dropping 8.7%—the worst daily performance since 2021—after briefly touching $80 per ounce.
The price drop follows the Chicago Mercantile Exchange’s decision to raise margin requirements on silver futures. This action forced highly leveraged traders to either add cash or liquidate their positions, contributing to the sell-off.
Compounding market concerns, China, a major silver producer, is reportedly planning to restrict silver exports starting in January. This potential restriction has raised alarms, particularly as the booming AI industry increases demand for the metal.
Elon Musk even weighed in on the soaring silver prices over the weekend, stating on X, “This is not good. Silver is needed in many industrial processes.”
Silver’s crucial role in various industries is a key factor influencing its value. Approximately 60% of all silver is used in industrial applications, according to the Silver Institute. Its superior conductivity makes it essential for solar panels, data center server boards, and electric vehicles.
“It’s vital for electronics and computing,” explained Michael DiRienzo, president and CEO of the Silver Institute. “It’s used in almost everything that has an on and off switch.”
DiRienzo also noted that the silver market has been experiencing a global structural deficit for the past five years. The metal was recently added to the US critical minerals list, raising fears of potential tariffs and trade restrictions.
Precious metals, including gold, silver, copper, and platinum, have performed exceptionally well this year. Gold has surged 67% year-to-date due to strong central bank purchases and a weaker dollar. Silver, benefiting from its industrial demand and smaller market size, has rallied nearly 150%.
However, some experts had cautioned against the rapid rise in gold and silver prices. Mike McGlone, senior commodity strategist at Bloomberg Intelligence, warned earlier this month, “When it gets this stretched, be careful.” He advised investors who have been bullish on precious metals to “take profits.”
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