Silver futures fell more than 10% due to higher futures margin raised by Zhi merchants.

COMEX gold and silver futures fell sharply on Tuesday after a sharp rise in futures prices prompted Zhi merchants to raise margin.

Rostin Behnam, acting chairman of the (CFTC) of the US Commodity Futures Trading Commission, said in a statement on Monday that US commodity regulators are closely monitoring recent volatility in the silver market and will work with other regulators to deal with any potential impact of these fluctuations.

The move follows a 17.8 per cent increase in the margin for COMEX silver futures on Monday to $16500 per hand, effective after the close of trading on February 2nd. This means that silver futures traders need to invest more money to open their positions.

"it is not uncommon for exchanges to take such measures when prices fluctuate wildly," said David Madden, a market analyst at CMC Markets UK. The price of silver has fallen under the influence of the exchange's measures. "

13:30 New York time (02:30 on February 3), the most actively traded COMEX3 monthly silver futures fell 3.016 U.S. dollars, or about 10.3 percent, to settle at 26.402 U.S. dollars per ounce. The contract on Monday closed the highest for a major contract since Feb. 19, 2013.

April gold futures, the most actively traded, fell $30.50 to settle at $1833.4 an ounce.

Platinum futures fell $42.80 in April to settle at $1096.0 an ounce.

March palladium futures fell $14.0 to settle at $2227.70 an ounce.

Among other COMEX metals, copper for three-month delivery, the most actively traded, fell 2.15 cents to settle at $3.5245 a pound.

Silver prices in major commodity markets soared on Monday, which analysts believe may have something to do with retail investors "shorting". Many market experts speculate that silver futures is a "new battlefield" opened by retail investors against short sellers. Since last week, some US social media posts have suggested that raising the price of silver could hit banks and hedge funds that hold large short positions.

Earlier, retail investors had invested heavily in the shares of several smaller, underperforming companies shorted by hedge funds, including Game Station, a US game retailer, prompting their share prices to soar, causing heavy losses for short-selling hedge funds.

Jim Wyckoff, a senior analyst at Kitco.com, said: "it looks like the silver market's attempt to push the air has failed, at least for now."

"the next goal for silver bulls is to close above this week's high of $30.35 resistance," he said. " "the goal of the bears is to close silver below the support level of $26." He added that retail investors were looking for other markets.

Barron Weekly believes that, unlike small companies, the silver futures market is about $1.5 trillion, and retail investors may not be able to "play" even if they work together.

At the same time, the price of gold has also fallen sharply. "the decline in silver has implications for gold," Madden said.

The stronger dollar also weighed on gold and silver prices on Tuesday, analysts said.

The dollar rose to a two-month high against the euro on Tuesday on the belief that the US could recover from the novel coronavirus epidemic earlier than Europe.

The dollar index rose 0.25 per cent, US and European stock indexes rose, global stock markets rose nearly 2 per cent, and oil prices jumped 2 per cent to their highest level in a year.