XAG/USD dips to near $72.50 as CME raises margins

Silver price came under pressure after the CME increased margin requirements on Silver futures.

The grey metal is set for an annual gain exceeding 150% in 2025, marking its strongest yearly performance.

December FOMC Minutes showed most participants favored pausing further rate cuts if inflation continues to decline.

Silver price (XAG/USD) has lost its nearly a 4.5% gain registered in the previous session, trading around $72.50 during the Asian hours on Wednesday. Silver prices came under pressure after the CME raised margin requirements on Silver futures, prompting leveraged traders to reduce positions as prices became technically stretched. Analysts said the pullback reflected position unwinding rather than any deterioration in underlying demand.

However, Silver prices are on track for an annual gain of over 150% in 2025, marking the metal’s strongest yearly performance. The rally accelerated after US President Donald Trump’s global tariff rollout and has been further supported by persistent geopolitical tensions, US rate cuts, and strong industrial demand, especially from the solar, electronics, and data-center sectors.

Silver’s rally has also been driven by a surge in speculative demand in China, pushing Shanghai Futures Exchange premiums to record highs. The elevated premiums signal intense local demand and have tightened global supply chains, mirroring earlier inventory squeezes in London and New York vaults.

Meanwhile, the Federal Open Market Committee’s (FOMC) December Meeting Minutes, released Tuesday, showed most participants favored pausing further rate cuts if inflation continues to ease. Some officials also argued for holding rates steady after three cuts this year aimed at supporting a weakening labor market.

The demand for safe-haven metals, including silver, increases over the geopolitical tensions, Uncertainty over a Russia-Ukraine peace deal, renewed Middle East tensions, and frictions between the US and Venezuela.