ProShares Ultra Silver (AGQ), the leveraged exchange-traded fund seeking twice the daily performance of silver bullion, surged 16.85% during the pre-market session on Tuesday. This significant upward move follows a period of extreme volatility in the underlying precious metal.
The sharp rise appears to be driven by multiple factors, including a regulatory change from the Shanghai Gold Exchange which adjusted the margin requirement for silver deferred contracts from 26% to 23% and reduced the daily price fluctuation limit. This easing of trading requirements comes as precious metals prices stabilized and rebounded collectively after a historic sell-off, with spot silver surging over 5% intraday.
Market analysts indicate the recovery represents a technical rebound after silver experienced one of its most dramatic declines in decades. The leveraged nature of the AGQ ETF amplifies both downside and upside moves in silver prices, contributing to the pronounced pre-market gain. Additionally, institutional views suggest that while recent volatility revealed overcrowded positions, the fundamental drivers supporting silver's long-term upward trend remain intact, including strong industrial demand from sectors like solar photovoltaics.
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