Silver prices slipped early Tuesday after a leading metals exchange slapped higher margin requirements on traders.
Comex silver futures were down 6% at $27.68 a troy ounce. They rose as high as $32.35 an ounce on Monday, their highest level since 2013, becoming the latest in a list of assets to be driven higher by day traders sharing tips on the WallStreetBets page on social-media site Reddit.
The Chicago Mercantile Exchange, which operates trading in New York of silver futures and options, said it was raising the margin required to trade silver futures after what it said was a “normal review of market volatility to ensure adequate collateral coverage.”
The change will come into force after the end of trading Tuesday.
Analysts warned that the music might stop for retail buyers of silver sooner than it would for small-cap stocks like GameStop. Silver is a significantly larger market and may make it harder to drive prices higher.
“We believe the new entrants into the market may tire and begin to liquidate silver holdings, with a commensurate price impact. Buyer beware,” said James Steel, chief precious-metals analyst at HSBC, in a note late Monday.
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