Trump said on Sunday that he and Zelensky were getting “a lot closer, maybe very close” to an agreement to end the war in Ukraine.Silver is up 181% this year, surpassing gold, thanks to its designation as a critical U.S. mineral, supply constraints and low inventories amid rising industrial and investment demand.
Today’s crash in silver is part of a broader gain-booking within the precious metals complex, as easing geopolitical tensions reduce demand for safe havens. Another reason for the selling pressure is a margin increase by the Chicago Mercantile Exchange (CME), which operates major derivatives exchanges such as CME, COMEX, CBOT and NYMEX, effective today.
The exchange has increased the initial margin requirement for the March 2026 silver futures contract to approximately $25,000, up from $20,000 earlier this month.
Jigar Trivedi, Senior Research Analyst at Reliance Securities, said the trend is generally positive but volatile and Rs 2.4 lakh is a short-term support for silver. US financial services firm BTIG has warned that precious metals have gone ‘parabolic’. “Parabolas only end one way, with an equal and opposite downward reaction. They do not correct over time,” the report said.
On the technical charts, silver was trading 89% above the 200-DMA. “Outside of the ‘Hunt Brothers’ crisis in 1979, even when silver was 60% above its 200 DMA, it has been significantly lower 20, 30 and 40 days later. While the fundamental story may be different this time, the 174% YTD gain has likely priced in much of that good news,” the report said.
Silver rose more than 10% on Friday, one of the largest single-day increases ever. The last time the stock rose 10% while hitting a multi-month high was in 1987, which marked the peak before falling 25% in subsequent weeks, BTIG analyst Jonathan Krinsky recalls.
Manish Banthia, CIO of Fixed Income at ICICI Prudential Mutual Fund, said history suggests such spectacular gains in silver rarely end softly.
“History offers sobering lessons. In 1979-80, silver rose from $6 to $49 an ounce before collapsing by more than 90%. In 2011, prices peaked around $48 and then fell by more than 75% in subsequent years. In both cases, silver had already multiplied several times before the decline began. Since the depths of the pandemic, prices have increased more than sixfold. In the past year alone, they have nearly tripled,” he says. said.
Past cycles show that once momentum breaks, silver can fall sharply – often by 50% or more.
#Silver #price #falls #hour #overheated #rally #cools #crossing #lakhkg