Gold, silver plunge after historic rally

Core Insights - Gold and silver prices have sharply declined after reaching record highs, with gold futures dropping over 4% to around $3,400 and silver futures falling 8% after hitting $80 per ounce [2][6]. Group 1: Market Dynamics - The Chicago Mercantile Exchange increased margin requirements on silver futures, leading to forced selling by highly leveraged traders [2]. - Precious metals have experienced significant price increases this year, with gold rising 67% and silver surging nearly 150% due to strong industrial demand and supply deficits [5][6]. Group 2: Industrial Demand and Supply Concerns - China, the third-largest silver mining country, is expected to impose export restrictions starting in January, raising concerns about supply amid growing demand from the AI industry [3]. - Silver is crucial for various industrial applications, with nearly 60% of its usage in electronics, solar panels, and electric vehicles [3][4]. Group 3: Market Sentiment and Warnings - Analysts are cautioning about a potential reversal in the prices of gold and silver, noting historical patterns of rapid price increases followed by significant declines [6][7]. - The president and CEO of the Silver Institute highlighted the ongoing global structural market deficit for silver, which has persisted for five years [4].