Silver (XAGUSD) is sliding lower by over 7% on the final day of 2025, although the precious metal is still on track to secure its best year on record with a year-to-date return of 144%.
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Silver is taking a hit in the last hours before the new year after exchange operator CME Group announced that it would hike margin requirements for the second time during the past week. In other words, CME increased the collateral requirements to hold silver futures, pushing over-leveraged traders out of positions.
Why Did Silver Rise so Much in 2025?
Geopolitical tensions, AI demand, mining disruptions, and falling rates led to silver’s historic rally this year. Silver has a vast array of industrial applications related to AI and is used extensively in data centers.
“These data centers that are getting created so fast in the United States, the US has to have it [silver] to protect its position in the world,” Scottsdale Mint founder and CEO Josh Phair told Yahoo Finance.
Silver is also viewed as a safe-haven asset and a store of value, making the metal more attractive during times of economic uncertainty and high inflation.
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