US-based CME Group has raised the initial margin and holding positions’ fee for all precious metals, with silver witnessing the second hike within a week.
The CME Group, which operates major derivatives exchanges such as CME, COMEX, CBOT and NYMEX, has raised the initial margin for silver to $32,500 from $25,000 for non-speculative accounts for silver 5,000 ounces contracts.
The CME’s new margin requirements, applicable to all future contracts, has resulted in silver dropping by one per cent the past week, gold by 3.5 per cent, platinum by 10 per cent and palladium by 7.5 per cent, data show.
2nd time in a week
For speculative accounts in silver 5,000 ounces contract, CME has increased the margin to $35,750 from $27,500 fixed at the start of the week. The new fee, including a rise in the fee for maintaining positions on COMEX to $32,500 from $25,000, came into force from Wednesday (December 31) evening.
It was the second time in a week that the margins were raised. Earlier, the initial margin was hiked to $25,000 from $22,000 for non-speculative accounts and to $27,500 from $22,000 from December 29 for speculative accounts. The move saw silver plunging over 12 per cent, the most since 2021.
The CME’s hike in initial margin and maintenance fee is 47 per cent for non-speculators and 55 per cent for speculators compared with the pre-December situation.
Until last week, speculators and non-speculators had to pay $22,000 each as initial margin and maintenance fee. In view of the CME group’s margin increase, silver has dropped almost one per cent since last week.
‘Unmanageable shorts’
The CME Group raised the margins as it feared that huge short positions built by speculators could lead to an unmanageable situation. On Thursday, silver was quoted at $71.26 an ounce. Silver March futures ruled at $70.86 an ounce, a rare backwardation that indicates shortage of physical silver.
On the Shanghai Futures Exchange, silver March futures ended at 17,080 Chinese yuan a kg ($75.93 an ounce). On Monday, the futures soared to 19,988 yuan a kg ($88.86 an ounce) before the CME new margin factor impacted the market.
In India, silver prices, which soared to a record high of ₹2,54,174 a kg on December 29, were quoted at ₹2,35,800. According to the Indian Bullion and Jewellers Association (IBJA), spot silver prices in the Mumbai market were ₹2,29,250 a kg, down from Monday’s AM price of ₹2,43,483.
The CME raised the initial margin for mini-silver futures to $16,250 for non-speculators from $12,500 and to $17,875 from $13,750 for speculators. Similarly, the maintenance fee for both has been increased to $16,250 from $12,500.
Hike across bullion metals
The US-based group has hiked the COMEX 100 gold trade initial margin to $22,000 ($22,000 earlier) and to $26,400 ($24,200) for non-speculators and speculators, respectively. The maintenance fee has been raised to $24,000 from $22,000.
For one ounce gold futures, the margin has been increased to $240 ($220) in the case of non-speculators and to $262 ($242) for speculators. The maintenance fee of $240 will apply for both.
A similar increase in margin and maintenance fee has been made for other gold and silver futures too.
This had dragged gold to $4,319.82 an ounce. Gold February futures on COMEX quoted at $4,332.10. In India, IBJA’s gold in the spot market closed at ₹1,33,461 for 10 gm, down ₹5,000 from ₹1,38,161 on Monday morning. On MCX, gold February futures were quoted at ₹1,35,690 per 10 gm.
In the case of palladium and platinum, the CME group has increased the initial margin to $22,000 ($18,000) for non-speculators and to $24,200 for speculators (19,800). The maintenance fee has been hiked to $22,000 ($18,000). As a result, platinum slid to $2,013.70 an ounce from a peak of $,2,510 a week ago. Palladium ruled at $1,624 an ounce from a three-year high of $2,022 an ounce.
‘Structural stress’
Rober Gottlieb, precious metal industry expert and former JP Morgan executive, said physical shortage in silver has resulted in lease rates soaring to 9-10 per cent for 3-12 months. Lease rates are the interest that a silver trader pays to banks to take silver for immediate delivery and returns it later.
“These are not signs of weakness, they are signals of mounting structural stress,” he said.
He said the silver market faces structural industrial deficits over the next four years, with mine supply expected to remain flat while industrial demand continues to rise.
David Jensen, a mining executive, said the one-month implied lease rate tenor for silver is 8.5 per cent currently.
A trade analyst commented on “X” (formerly Twitter) that when COMEX tightens margin requirements, the positions get washed out and price takes a hit. “Nothing has changed. Physical (silver) at the bullion vaults is historically low,” the analyst said.
Published on January 1, 2026