The precious metals market on December 29th was truly a roller coaster—within just a few hours, the bulls were knocked down from high levels. London silver once surged to a historic high of $83/oz, then turned around and fell more than 10%, with intraday volatility reaching 15%; London gold also plummeted 4.52%, breaking through the $4400 mark and finally closing at $4320/oz; LME platinum and palladium also took a hit, plunging over 15% intraday, marking the largest single-day decline in years.

What caused this wave of decline? Basically, several factors came into play simultaneously. The CME raised the margin requirements for precious metals futures by over 10%, directly triggering the market; coupled with the end-of-year profit-taking and tax-saving sell-offs, which fueled a cascade of automated trading; and Elon Musk’s warning that high silver prices could impact industrial demand further stoked the flames. However, despite this sharp correction, silver still gained over 170% for the year, and gold rose more than 70%, both hitting multi-year best performances.

Why do some still remain optimistic about the future? The core logic hasn’t changed. The Federal Reserve has cut interest rates three times this year, signaling an open easing cycle; expectations for aggressive rate cuts next year are even higher. Central banks worldwide are continuously increasing their gold holdings, and our central bank has been buying for 13 consecutive months. Looking at silver supply—there has been a structural shortage for five consecutive years, no joke. Industrial demand accounts for over 60%, with emerging sectors like photovoltaics and new energy vehicles increasingly hungry for silver, yet available inventories only last 1 to 1.5 months, creating a significant gap.

How do major institutions view the market? JPMorgan predicts gold could reach $5000 by the end of 2026; in a survey by Kitco, 57% of respondents believe silver prices will break through $100/oz. The industry consensus is that this volatility is just a short-term correction at year-end. With supply-demand gaps and monetary easing supporting each other, the upward trend in precious metals is expected to continue.