ProShares Ultra Silver (AGQ), a leveraged ETF tracking silver, plummeted 17.64% during intraday trading on Monday, mirroring a sharp reversal in silver prices. The drop followed an overnight surge in silver to record highs, which was quickly erased by heightened volatility in precious metals markets.

The volatility was driven by multiple factors, including reports of potential silver export restrictions from China, a major producer and refiner of the metal. Tesla CEO Elon Musk criticized the policy, highlighting its potential impact on industrial supply chains. Additionally, CME Group announced a 25% increase in margin requirements for silver futures, adding pressure on leveraged positions. Year-end position adjustments and upcoming commodities index rebalancing further contributed to the sell-off.

Silver's demand remains strong due to its use in AI data centers, electric vehicles, and solar panels. However, tight supply—evidenced by dwindling stockpiles and record-high borrowing costs—has amplified price swings. The U.S. designation of silver as a "critical mineral" and impending 2026 tariffs add further complexity to the market outlook.