A spike in price volatility across precious metals has prompted OANDA Japan to issue formal caution to traders, warning them of unstable market conditions and the potential for sudden trading interruptions.
The broker issued a public warning today (Wednesday), highlighting severe price swings in silver (XAG/USD) and signaling that trading conditions may continue to deteriorate in the days ahead.
“The precious metals market, especially silver (XAGUSD), is experiencing extremely high price fluctuations, which has widened spreads and made it difficult to predict,” the broker announced.
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OANDA Flags Market Risk in Silver Trading
The broker reported that silver CFDs have seen “much more volatile price movements than usual,” leading to unpredictable trading conditions and increased risks for leveraged positions. The sharp moves have already caused spreads to widen, meaning execution costs for traders have risen significantly.
According to the notice, liquidity in the interbank market has also dropped, making it harder to open or close positions without slippage. This environment increases risk for retail traders, who may face sudden price gaps.
Instability in Funding Rates
OANDA Japan also warned of instability in funding rates, which are fluctuating sharply in line with market stress. As a result, margin requirements for precious metals CFDs—especially XAG/USD—may be adjusted at short notice. The broker urged traders to monitor their account balances closely to avoid forced liquidations during volatility spikes.
Related: Silver Smashes Through Four-Decade Ceiling as Gold Rockets Past $4,000
The firm noted that worsening conditions could force it to take protective action: "Depending on the condition of the underlying market, we may temporarily suspend trading of commodity CFDs, particularly silver (XAGUSD), to protect customer capital."
"In these circumstances, we strongly encourage you to seek out reliable financial news sources and closely monitor funding rates and margin requirements for all precious metal transactions."
Interestingly, Silver recently reached its highest price in approximately 40 years, surpassing $50 per ounce. This marked the first time since the 1980s that silver has traded at such elevated levels, following strong gains in gold that have also drawn attention to precious metals.
Since January 2025, when silver was priced around $28.92 per ounce, the metal has gained roughly 73% in under a year. The surge has attracted investor interest, reflecting renewed focus on silver as a significant asset in the metals market.
Conversely, Gold hit a record high of $4,179.48 per ounce on Tuesday, marking a nearly 60% gain year-to-date as investors flocked to safe-haven assets amid rising US-China trade tensions and expectations of Federal Reserve rate cuts.
