Tuesday, August 23, 2011

New Shanghai Fututures Exchange Hikes Gold Margins for Forward Contracts 12%

The Shanghai Gold Exchange announced today margin hikes of 12% for gold forward contracts will go into effect on Friday.  They are also considering gold and silver futures margin hikes.
Still waiting for margin hikes from the CME.
The fact that Tuesday has almost passed without a silver or gold margin hike by the CME indicates to us that The Bernank may in fact disappoint on Thursday and NOT OFFICIALLY announce QE3.
We simply do not see the Fed publicly announcing QE3 with gold within striking range of $2,000, which would likely be instantly met on Thursday should QE3 be announced with gold trading near $1900.

The Shanghai Gold Exchange will raise margin requirements for its gold forward contracts for the second time this month to 12 percent starting on Friday, in a move aimed at curbing excessive risk-taking following the rapid rally in gold prices.
This is the second time the exchange has raised collateral requirements on gold forward contracts this year — both times in August — as international gold prices hit a series of record highs over the past few weeks, boosted by a flight to safety on worries over a stalling U.S. recovery and crippling sovereign debt in the euro zone.

The Shanghai Futures Exchange could raise margins on its gold futures contract soon too, said Li.
The new margin would require an additional 490.4 million yuan ($76.6 million) to be posted to the exchange.
Trading volume on the most popular gold forward contract hit a three-month high of 26,032 grams on Aug. 11, and eased to just shy of 20,000 grams on Tuesday as the exchange finished the afternoon session. The average volume so far this month stood at 14,999 grams, compared to a daily average of 9,138 grams in 2010.
The exchange also said it was closely eyeing silver contract price movements and would consider raising trading margins, transaction fees or costs of rolling over forward contracts should volatility persist.