On February 5 local time, the Chicago Mercantile Exchange Group announced that it would increase the initial margin for its COMEX 100 Gold Futures from 8% to 9% and raise the initial margin ratio for its COMEX 5000 Silver Futures from 15% to 18%.
The Chicago Mercantile Exchange (CME) has increased margin requirements again, causing silver prices to fall below the $66 mark.
On February 5 local time, the Chicago Mercantile Exchange Group announced that it would increase the initial margin for its COMEX 100 Gold Futures from 8% to 9% and raise the initial margin ratio for its COMEX 5000 Silver Futures from 15% to 18%.
During the Asia-Pacific session on Friday,$XAG/USD (XAGUSD.FX)$the price continued its sharp decline from yesterday, breaking through several key integer levels, with a daily drop of over 7%. Spot gold fell more than 1.6%, dropping below the $4,700 mark.
Over the past week, spot silver has retreated more than 40% from its all-time high on January 29. On Thursday, silver plunged 19%, wiping out all its gains for the year, with market volatility reaching unprecedented levels, marking the most turbulent period since 1980.
As previously noted by Wall Street News, when silver peaks, exchanges historically intensify regulatory measures, including frequent margin hikes. In this current silver market cycle, the CME's willingness to intervene has been exceptionally strong.
Within just the past month, the CME has raised margin requirements five consecutive times, a frequency that is highly unusual.
December 12, 2025: Announced the first increase in margins, raising initial margin from 22,000 to 24,200.
December 29, 2025: Second margin hike, increasing initial margin from 24,200 to 25,000.
December 31, 2025: Third margin hike, significantly raising initial margin from 25,000 to 32,500.
January 28, 2026: Fourth margin hike, switching to a percentage system, increasing from 9% to 11% (high-risk categories increased from 9.9% to 12.1%).
January 31, 2026: Fifth margin hike, further increasing from 11% to 15% (high-risk categories increased from 12.1% to 16.5%).
Technical indicatorssuggest that silver has not yet reached the "oversold" condition.
Silver's major peak was not caused by "excessive rises," but rather by being "choked off."
Historically, silver crashes have never been due to "rising too high" but rather the inevitable result of high volatility, high leverage, and abrupt regulatory intervention.
The "circuit-breaker style" collapse in 1980 is the most representative example. On January 21 of that year, the day silver hit its historical peak, the New York Mercantile Exchange (COMEX) coincidentally announced measures to "allow only liquidation, prohibiting new positions."
Prior to this, the exchange had repeatedly increased margin requirements and tightened position limits. When bulls could no longer leverage to push prices higher, the game came to an abrupt halt—within the following four months, silver prices plummeted by 67%.
The 2011 crash adopted a 'boiling frog' strategy. The CME implemented five stepwise increases in margin requirements over nine days. Although it did not cut off leverage all at once, the logic was the same: holding costs rose exponentially, causing the bulls' funding chain to break. Silver prices peaked after the second margin hike and fell by 36% over 16 months.
Both crashes shared common characteristics:
Volatility surged to extreme highs, currently reaching 1800%, whereas historically it remained below 200% for 93% of the time.
Price ratios became severely distorted, with the current silver-to-oil ratio breaking above 1.8, far exceeding the historical range of 0.2 to 0.5.
The key point is that the confirmation of a top is not marked by a natural price pullback but by a sudden change in rules. When exchanges force deleveraging through higher margin requirements, frenzied bullish capital runs out of steam, causing prices to collapse like a building losing its support.
The major peak in silver is fundamentally a process of leverage unwinding. When markets transition from orderly trading to chaotic gambling, regulatory intervention becomes the straw that breaks the camel's back.
Editor/Jayden
