Gold and silver prices extended their sharp decline on Monday after CME Group raised margin requirements, triggering forced selling across precious metal markets. The move followed last week’s heavy losses, which were sparked by uncertainty surrounding the new US Federal Reserve leadership and shifting investor expectations.
As a result, spot gold fell by another 3.6 percent to around $4,686 per ounce, after recording its worst single-day drop since 1983. Meanwhile, US gold futures for April delivery also slipped, reflecting reduced confidence among traders and weaker demand for safe-haven assets.
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Similarly, silver suffered even heavier losses, dropping more than 6 percent to about $78.96 per ounce, following its biggest daily fall on record in the previous session. Analysts believe margin hikes accelerated the decline, as traders were forced to liquidate positions to meet higher capital requirements.
Moreover, CME increased margins for gold futures from 6 percent to 8 percent, while silver margins were raised from 11 percent to 15 percent. These changes made trading more expensive, reduced market liquidity, and pressured leveraged investors to exit positions rapidly.
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At the same time, broader financial markets also reacted negatively, with Asian stocks sliding and US equity futures falling by nearly one percent. Experts say the new policy direction at the US central bank has strengthened the dollar, making gold less attractive for investors.
Despite the sharp correction, some analysts remain optimistic about long-term prospects, arguing that structural demand for real assets remains strong. However, in the short term, precious metal markets are expected to stay highly volatile as traders adjust to new financial conditions.