Market Update: Silver Prices Drop Sharply

New York, January 1, 2026, 12:49 ET — Market Closed

• Spot silver dropped $4.35, which is about 6.02%, settling at $72.29 an ounce, according to JM Bullion.
• The iShares Silver Trust (SLV) also saw a decline, falling 6.61% to $64.42 on Wednesday as the metals market retreated.
• Traders are currently considering the CME’s increased margin requirements for metals and China’s newly approved list of silver exporters.

The price of physical silver fell sharply on Thursday, hitting $72.29 per ounce by 12:41 p.m. ET, which is a 6.02% decrease for the day according to JM Bullion data. Meanwhile, US stock markets were closed for New Year’s Day.

This decline follows a late December surge in silver prices, which attracted leveraged investments. As a result, there’s a concern that increased collateral requirements from exchanges could lead to forced sales. Additionally, the tightening of China’s export regulations is drawing attention to supply dynamics as 2026 begins.

Silver exists in a unique position — while it’s a valuable metal for investors, it’s also vital for manufacturers in sectors like solar energy and electronics. This dual nature can lead to heightened volatility, particularly as interest rate expectations fluctuate alongside policy changes.

With many major markets closed for the holiday season, liquidity may be reduced, leading to intraday price swings. Regular coverage of precious metals by Reuters is set to resume on January 2nd.

This pullback comes after an impressive 2025, where silver gained 161%, hitting over $80 an ounce for the first time.

The CME Group has announced that new margin requirements would take effect right after closing on December 31st. Typically, increases in margin necessitate either additional cash from leveraged traders or a reduction in their market exposure.

“We experienced noticeable volatility yesterday, but things seem to have stabilized a bit today,” remarked Peter Grant, a senior strategist at Zaner Metals, according to Reuters.

Traders are also reassessing their interest rate predictions after a recent Federal Reserve meeting showed significant divisions among members. This is important for silver since it doesn’t generate yield. Lower interest rates generally make holding silver a more attractive option compared to cash or bonds.

On the supply side, China’s Ministry of Commerce announced that 44 companies will be authorized to export silver from 2026 through 2027, which is an increase compared to the previous year. The restrictions stem from national security concerns, particularly regarding critical minerals.

In the last trading session before the holidays, SLV fell 6.61% to $64.42, while shares of silver mining companies also dropped. For instance, Pan American Silver was down about 1.7%, and First Majestic Silver fell by approximately 1.5%.

Interestingly, Michael L. Clary, senior vice president at Hecla Mining, announced his transition to a consulting role effective January 1, following a filing with the SEC.

As the next trading session approaches, investors will be watching closely to see if spot silver can hold above the $70 mark after this week’s fluctuations. A sustained dip below that level may put pressure on short-term traders, while a rebound toward the mid-$70s could suggest that the sell-off driven by margin changes is subsiding.

Upcoming on the economic calendar is the US employment report for December, scheduled for January 9, followed by the December CPI report on January 13. The next Federal Reserve policy meeting will take place shortly thereafter, on January 27-28, and any shifts in interest rate expectations or the dollar’s trajectory could have a swift impact on silver prices and related stocks.

Despite adjustments in speculative positioning after the December spike, analysts remain optimistic about industrial demand and foresee a potential cut in US interest rates in 2026 as critical factors, according to Reuters.