Tags: gold | silver | margins | cme

Exchange Boosts Margins for Gold, Silver Contracts

Sunday, 25 Sep 2011 05:01 PM

CME Group Inc. increased the margin requirements on gold and silver trading after prices of the metals plunged in the last two days.

The minimum cash deposit for gold futures will rise 21 percent to $11,475 per 100-ounce contract in the speculative Tier 1 category at the close of trading on Sept. 26, Chicago- based CME said in a statement. For silver, the minimum cash deposit was raised to $24,975 from $21,600.

Comex is making it more expensive for speculators to trade after silver plunged the most since October 1979 and gold had its biggest two-day slide in 28 years. Open interest for gold options climbed to a record 1.46 million contracts on Sept. 21, CME said.

“It’s likely that more speculators will exit the market, adding to selling pressure in the near term,” Marshall Berol, a co-portfolio manager of the Encompass Fund in San Francisco, said in a telephone interview.

The CME last raised gold margins on Aug. 24, when prices fell 5.6 percent, the biggest slump since March 28.

Gold futures for December delivery plunged $101.90, or 5.9 percent, to settle at $1,639.80. In two days, the metal dropped 9.3 percent, the most since February 1983. The weekly decline of 9.6 percent also was the most since that year.

The 10-day historical volatility for gold jumped to 42.84 percent, the highest since March 2009, Bloomberg data show.

Silver futures for December delivery fell $6.477, or 18 percent, to $30.101 an ounce on the Comex, the biggest drop since October 1979.

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CME Group Inc. increased the margin requirements on gold and silver trading after prices of the metals plunged in the last two days. The minimum cash deposit for gold futures will rise 21 percent to $11,475 per 100-ounce contract in the speculative Tier 1 category at the...
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2011-01-25
Sunday, 25 Sep 2011 05:01 PM
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