Silver prices staged a strong recovery on Monday, climbing back above the $80 per ounce threshold as a retreat in the U.S. dollar provided a tailwind for the precious metal. Spot silver traded at $81.45 by mid-morning Eastern Time, marking a daily gain of $3.75.
Exchange Tightens Rules Amid Volatility
In response to recent market swings, the CME Group increased margin requirements for COMEX silver futures contracts. The initial and maintenance margins were raised to 18% from 15%, a move aimed at mitigating default risk following a period of significant price fluctuation.
The rally was partly attributed to broad dollar weakness, which makes dollar-denominated commodities like silver cheaper for holders of other currencies. Market participants are closely watching the upcoming U.S. economic calendar, which features key releases on employment and consumer prices. These reports could influence expectations for Federal Reserve interest rate policy, with markets currently anticipating at least two rate cuts in 2026.
Futures and Related Assets Gain
U.S. silver futures mirrored the spot market's strength, advancing approximately 5.9% to $81.43 per ounce. The iShares Silver Trust (SLV), an exchange-traded fund that tracks silver prices, saw its shares trade higher near $73.93. Internationally, India's March silver contract on the MCX exchange opened nearly 4% higher.
Some analysts expressed caution, noting the potential influence of speculative trading. "The activity in silver reflects substantial speculative long positioning," remarked Jim Wyckoff of Kitco Metals, who also warned that commodities can be susceptible to a sharp downturn following a rapid price ascent.
While often viewed as a safe-haven asset, silver's price is also sensitive to industrial demand cycles, with significant uses in electronics and jewelry. The metal's near-term trajectory is likely to hinge on the dollar's path and the tone of incoming U.S. economic indicators.
