Tuesday, August 23, 2011

Gold Tops $1,910 for First Time

I told you folks the futures exchanges would hike margin requirements for gold contracts to "control volatility and mitigate risks", which is half-true.  The other half is they have to protect the perma-short bullion banks from imploding, as prices on precious metals soar.  Only I thought the COMEX (or CME) would act first.  It looks like their counterparts in Shanghai beat the boys in New York to it.  Or maybe they're the same players on the other side of the pond.

The Shanghai Gold Exchange will increase the trade margin requirement for its gold forward contracts for the second time in a month following recent rapid increases in gold prices. Margin requirements will be raised to 12 percent from 11 percent from settlement on Aug. 25, to prevent risks, keep the market stable and protect investors’ interests, the bourse said in a statement posted on the website today.

CME Group Inc., the world’s futures market, hiked the initial and maintenance margins on its gold contracts by 22 percent from the close of business Aug. 11. It last boosted gold margins on Jan. 20 and decreased them on June 20, according to data on its website.

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