MUMBAI: After hitting life-time highs in the morning trade, precious metals-- gold and silver along with copper tanked up to 13% in the afternoon on Monday weighed down by the easing geopolitical tension (US president Donald Trump met his Ukrainian counterpart Volodymyr Zelenskyy to end the war) and China’s new export curbs on the white metal along with the higher margins imposed on silver futures contract by Western markets.
The prices of gold, silver and copper sharply dropped in the afternoon after seeing a significant bull run. While silver has rallied close to 145% so far this year, gold has done so by 79% in dollar terms while in rupee terms domestic silver futures had crossed Rs 2.53 lakh on the MCX in Monday morning trade following the spot price of silver hit an all-time high at $82.95 an ounce (28.35 g) on the CME.
So far in 2025, by rallying over 192% silver has outshone gold by a wide margin as the yellow metal has rallied around 79% so far only—better than the 74% it had notched up in 1979 which was the best ever annul rally for the yellow metal. The rally was propelled by its designation as a critical mineral by the US, supply constraints, and low inventories amid rising industrial and investment demand.
This rally comes amidst the metals gaining sharply in the last week to the tune of 3.8% (gold) and over 14% for silver. Gold futures climbed to a record high of $4,581.30/ounce on the CME last weekend, while silver futures surged to nearly $79.70/ounce, marking the largest one-week dollar gain on record for silver.
In the domestic market, the silver futures on MCX peaked at Rs 2,53,280/kg of 999 purity early Monday, up 5.63% from its previous close at Rs 2,39,787 while gold futures peaked at Rs 1,39,940/10 grams last week, marking the seventh consecutive positive weekly close.
The rally fizzled out in afternoon trade as the market reacted to reports of a possible end to the Ukraine war following a meeting between Donald Trump and Volodymyr Zelenskyy, along with news of China imposing curbs on silver exports from January 1. Adding to the pressure, major Western exchanges raised margin requirements on silver futures by $5,000 to $25,000 per lot, triggering fresh caution among traders.
Accordingly, gold futures with February expiry fell around 2% after nearing their lifetime high levels to fell to Rs 1,37,646/10 grams while April and June contracts also fell nearly 2% after hitting fresh all-time highs earlier during the day.
Silver, which has rallied the most, fell more sharply with March futures plunging 8% after hitting a fresh lifetime high to Rs 2,53,280/kilogram. The futures contracts with May and July expiries also erased all gains, falling 9% and 10% respectively after hitting fresh lifetime highs during the day.
After hitting a fresh lifetime high of Rs 1,392.95/kilogram, copper futures with January expiry tanked 13% to Rs 1,211.05/kg while February and March contracts also erased all gains after hitting new all-time highs and slipped into the red.
The parabolic rise of the white metal has been reinforced by speculative inflows and lingering supply dislocations across key trading hubs following the historic short squeeze in October. China’s export curbs from next month have further strengthened the structural bullish outlook.
But in Chennai, Hyderabad and Kerala, the metal was spot trading at Rs 2,73,900, while in Mumbai, Delhi, Kolkata and Bengaluru the spot metal was quoting Rs 2,50,900, according to the price quoted by Goodreturns.
According to Renisha Chainani, head of research at Augmont Enterprises, silver has crossed the $80.0z mark (Rs 2,50,000) mark last week—which is up 16% last week, 40% this month, and 175% in 2025.
“This rise has been fueled by speculative inflows, residual supply disruptions from an October short squeeze, central bank buying, ETF inflows, and three US Fed rate cuts, with markets gradually pricing in another easing in 2026,” she said.
She further said gold has already touched the target resistance of $4,575 (Rs 1,40,000) and prices are likely to consolidate here. Bull trend can continue until prices are trading above $4,450 (Rs 1,36,000).
Similarly, silver too has touched the target resistance of $75 (Rs 235,000) and $80 (Rs 2,50,000) and there is more likelihood of consolidationg from here after this sharp run-up. Bull trend can continue until prices are trading above $75 (Rs 2,40,000).
International gold support level is seen at $4450/oz and resistance is at $4575/oz, the same for domestic prices is at Rs 1,36,000/10 gm and Rs 1,40,500/10 gm, respectively. Similarly global silver support level is : $75/oz and resistance level is at $82.5/oz and the domestic prices respectively are seen at Rs 2,40,000/kg and Rs 2,54,000/kg, she said.
Traders said profit-booking was another reason for the plunge. "On the technical front, after a staggering rally of 2025, we don't expect similar returns in 2026,” said Pranav Mer, vice-president, commodity & currency research at JM Financial Services.
Another reason was the Chinese supply constraint with reports saying that China has announced that it will restrict the export of physical silver starting from January 1, and businesses will be required to apply for export licenses. This policy will be in effect until 2027.
“Proposed export licensing requirements starting January 1, further signal tighter control over outbound flows, restricting the availability of physical silver in global markets at a time when other inventory hubs are already under pressure,” said Motilal Oswal Financial Services.
"The silver market in 2025 has moved beyond a conventional bull cycle and entered a structural phase, driven by prolonged physical supply deficits, inventory depletion, and policy-led supply constraints. The widening disconnect between paper pricing and physical availability highlights deeper stress in global price discovery mechanisms," Navneet Damani, head of commodities research at Motilal Oswal Financial Services, said.
The immediate trigger however was the CME hiking the margin on silver contracts. The Chicago Mercantile Exchange announced new regulations last Friday. The CME Group operates major derivatives exchanges such as CME, Comex, CBOT and NYMEX, announced it was imposing a $25,000 initial margin for March 2026 silver derivative contracts. Earlier, it was imposing $20,000 margin. This may have led to short-covering and profit booking.