Silver Price Volatility Driven by China Export Restrictions and CME Margin Hikes

On December 29, 2025, silver prices experienced extreme volatility, reaching a record high of $84 per ounce before plummeting more than 5% later that day [0]. This swing was primarily driven by two interconnected factors: upcoming supply constraints from China and a regulatory change by the CME Group. China, a major global silver exporter, announced it will require government licenses for silver exports starting January 1, 2026 [0], a move that initially fueled buying momentum due to fears of tightened global supply. However, the CME implemented its second margin hike in two weeks for silver futures, raising the initial margin requirement for the March 2026 contract from $20,000 to $25,000 [0]. Historical data shows that such margin hikes have previously forced leveraged funds to unwind positions, triggering sharp price declines [0].

The simultaneous occurrence of a supply-side shock (China’s export restrictions) and a market structure change (CME margin hike) underscores the sensitivity of precious metals markets to both fundamental and technical factors [0]. The rapid reversal from record highs highlights the impact of leveraged trading in volatile markets, where margin adjustments can amplify price swings. Additionally, related stocks like Pan American Silver (PAAS) have seen significant gains, including a 138% year-to-date rally as of December 25, 2025, and a 2.9% increase on December 26, reflecting investor optimism that preceded the recent volatility [0].

Short-term risks include continued volatility as leveraged positions are unwound and market participants adjust to the new margin requirements [0]. The upcoming Chinese export restrictions introduce uncertainty about global silver supply chains, which could further amplify price fluctuations in the near term. For long-term investors, the potential for sustained supply constraints may present opportunities if silver prices stabilize at higher levels, but short-term volatility requires cautious risk management [0].

This analysis covers silver’s wild price swings on December 29, 2025, driven by China’s impending export restrictions and the CME’s margin hike. Historical parallels with past margin hikes indicate ongoing volatility risk. Pan American Silver (PAAS) has shown strong year-to-date performance, though the recent price volatility may impact the stock. The Barron’s article (December 29, 2025) provides the initial context for this event [1].