Gold and silver had a rocky end to a year that saw the precious metals reach all-time highs.
After trading at new highs in thin, post-Christmas trading, both metals collapsed Monday in a margin-driven selloff, rebounded sharply Tuesday — then slid again early Wednesday as the bounce ran out of steam.
Gold sank more than 4% Monday to around $4,355 an ounce after peaking near $4,565 late last week, before clawing back ground Tuesday as dip buyers rushed in.
But on Wednesday, the rebound faded. Gold futures were back under pressure, slipping roughly 1% to about $4,327 an ounce and pulling further away from last week’s record high near $4,580.
Silver’s swings were even more violent.
The metal plunged nearly 9% Monday to just above $73 an ounce after briefly trading north of $84 over the weekend — one of its worst single-day drops in years — then exploded higher Tuesday in a speculative snapback.
That rally didn’t last. On Wednesday, silver futures again dropped about 9% to around $71 an ounce, erasing much of the prior day’s gains and underscoring how quickly momentum has been flipping in the overheated market.
The initial selloff was triggered by a decision from CME Group to raise margin requirements on precious metals futures, a standard move after extreme volatility that forces traders to post more cash to maintain leveraged positions.
The higher margins took effect Monday and immediately sparked forced selling, accelerating profit-taking during one of the quietest liquidity periods of the year.
“The headlines move faster than fundamentals, and volatility gets amplified,” Dean Lyulkin, CEO of Cardiff, told The Post.
“This is one of the thinnest trading periods of the year, and when liquidity dries up, prices can jump or drop on very little real conviction.”
The damage was short-lived.
By Tuesday, both metals clawed back a sizable chunk of their losses as investors stepped in, betting that the selloff was technical rather than fundamental.
Gold rebounded about 1%, trading back in the $4,385 to $4,400 range, while silver staged a stunning comeback — surging as much as 10% intraday to trade between $75.50 and $78 an ounce.
The rebound came as traders refocused on the drivers that powered the historic 2025 rally: expectations for Federal Reserve rate cuts, ongoing geopolitical tensions, heavy central bank buying and a weaker US dollar.
Silver’s bounce was further fueled by supply concerns, including looming export restrictions from China set to take effect Jan. 1, and relentless demand from solar, electric vehicle and electronics manufacturers.
Still, the whipsaw action highlighted the starkly different forces at work in the two metals.
“Gold and silver are behaving very differently,” Lyulkin said.
“Gold’s strength still makes sense as a macro hedge and store of value. Silver is a different animal.”
Silver trades as a hybrid — part industrial metal, part speculative vehicle — a dynamic that becomes especially pronounced when volatility spikes.
“A seven percent move in a single day is not long-term investors calmly repositioning,” Lyulkin said.
“It is momentum and fast money pushing the market around.”
That speculative element has become increasingly visible as silver has dramatically outpaced gold this year, at one point posting gains more than double those of the yellow metal.
“When silver snaps back after one of its worst days in four years, that is usually a sign speculation is creeping back in,” Lyulkin said.
“Silver has a long history of attracting traders when volatility picks up, which makes it a much rougher ride for individual investors, especially in thin markets where moves get exaggerated in both directions.”
Despite the tumult, the broader bull market remains intact.
Even after the pullback, gold and silver are on track for their best annual gains since 1979, with silver up roughly 150% to 160% for the year and gold up about 65% to 70%.
Market participants say the speed of the rebound suggests there is still deep demand waiting beneath the surface — particularly from investors who missed the initial run and viewed the selloff as a rare entry point.
But the late-December turbulence also serves as a warning.
“For individual investors, the danger is confusing motion with meaning,” Lyulkin said.
“Sharp moves can feel like a signal when they are really just noise.”
