Comex Lifts Gold Margins, Raising Speculation Cost

Wednesday, 24 Aug 2011 06:01 PM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
CME Group Inc. raised the margin requirements on gold trading at its Comex unit for the second time this month, after prices surged to a record above $1,900 an ounce before plunging Wednesday by the most since March 2008.

The minimum cash deposit for borrowing from brokers to trade gold futures will rise 27 percent to $9,450 per 100-ounce contract in the speculative Tier 1 category at the close of trading Thursday, Chicago-based CME said in a statement. On Aug. 11, the increase by the exchange was 22 percent to $7,425. The cost of one contract after Wednesday’s close was $175,730. The maintenance margin will rise to $7,000 from $5,500.

Comex is making it more expensive for speculators to trade the metal as open interest for gold options climbed to a record 1.263 million contracts on Aug. 18 and prices slumped more than 7 percent in two days, erasing the gain of the past two weeks that sent the metal to a record $1,917.90 yesterday.

“It will add selling pressure, even after today,” Frank McGhee, the head dealer at Integrated Brokerage Services said in a telephone interview from Chicago. “This is the exchange reacting to the volatility.”

The exchange last raised margins on Aug. 11, when prices fell 1.8 percent, the biggest slump since June 23.

Wednesday, gold futures for December delivery plunged $104, or 5.6 percent, to settle at $1,757.30 at 2:02 p.m. in New York, the biggest decline for a most-active contract since March 19, 2008. As of 5:10 p.m., the contract traded at $1,761.20.


© Copyright 2014 Bloomberg News. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web

Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
Privacy: We never share your email.
 

You May Also Like
Around the Web

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved