On Monday afternoon (December 29, 2025), the prices of gold, silver, and copper witnessed a massive sell-off, plummeting up to 13% shortly after hitting fresh lifetime highs in the morning trade.
- Copper: Tanked the hardest, falling 13%.
- Silver: Plunged significantly, with March futures dropping 8% and other contracts falling up to 10%.
- Gold: Saw a correction of around 2% after its record run.
4 Key Reasons Behind the Fall
- Easing Geopolitical Tensions (Ukraine War Talks)The primary trigger for the sell-off was the potential de-escalation of the Russia-Ukraine conflict. Reports surfaced regarding a meeting between US President Donald Trump and Ukrainian President Volodymyr Zelenskyy aimed at ending the war. This development significantly reduced the “safe-haven” demand that had been propping up gold and silver prices.
- CME Margin Hike on SilverThe CME Group (Chicago Mercantile Exchange) announced a hike in the initial margin requirements for silver futures contracts. The margin was raised by $5,000, taking it from $20,000 to $25,000 per lot. This move made holding positions more expensive for traders, triggering a wave of liquidation and short-covering.
- Aggressive Profit BookingThe metals had seen a historic rally in 2025, with silver rising over 192% and gold by 79% year-to-date. After hitting fresh all-time highs on Monday morning, traders rushed to book profits, leading to a sharp technical correction in the afternoon.
- China’s Export Curbs & “Sell the News” ReactionWhile China announced it would restrict silver exports starting January 1, 2026 (requiring export licenses), the market reaction was volatile. Although typically a bullish signal (supply constraint), the confirmation of the news likely triggered a “buy the rumor, sell the news” event, contributing to the session’s extreme volatility and eventual crash.
