CME Group has announced a hike in margin requirements for Comex silver futures after prices surged to record highs this week, underlining the sharp rise in volatility across precious metals markets.
In a statement issued on Tuesday, CME said margins for non-heightened risk profiles on Comex silver futures will rise to 11% of notional value, up from 9%. For heightened risk profiles, margins will be increased to 12.1% from 9.9%. The exchange also said margins on platinum and palladium futures will be raised.
Silver rally triggers risk controls
Spot silver rose 0.6% to $113.63 per ounce, after touching an all-time high of $117.69 on Monday, January 26. Prices are now up nearly 60% year-to-date, making silver one of the strongest-performing commodities globally.
The pace of the rally has been unusually rapid. Silver climbed from $80 to $90 per ounce in about 15 days, advanced from $90 to $100 in 10 days, and crossed the $100–$110 range in a single trading session, highlighting intense buying pressure and elevated speculative activity.
Market participants attributed the surge to a combination of safe-haven demand, trade-related uncertainty and spillover strength from gold, which has also been trading at record levels.
Analysts flag momentum, but note stretched conditions
Aamir Makda, Commodity and Currency Analyst at Choice Broking, said silver reached record levels as investors reacted to rising geopolitical risks and tariff-related concerns.
He noted that prices on domestic exchanges continue to trade above key moving averages, indicating strong momentum. However, technical indicators such as the Relative Strength Index suggest the metal is currently in overbought territory.
Makda added that while the broader trend remains moderately positive, emerging RSI divergence could signal near-term consolidation, even as higher resistance levels lie ahead if prices continue to advance.
India impact: jewellery sector watches prices closely
In India, elevated silver prices have added pressure to the gems and jewellery industry. Colin Shah, Managing Director of Kama Jewelry, said rising gold and silver prices are challenging for manufacturers and exporters.
He added that the recently signed India–EU Free Trade Agreement could offer some relief by reducing duties for exporters, potentially helping diversify demand toward European markets at a time of heightened precious-metal prices.
Margin hikes reflect volatility concerns
Margin increases are a standard risk-management tool used by exchanges during periods of sharp price swings. By raising collateral requirements, exchanges aim to limit excessive leverage and reduce systemic risk as volatility rises.
CME’s move signals that silver’s recent price action has reached levels that warrant tighter controls, even as global interest in precious metals remains elevated.
