This was to be expected – after recent gold gains, Chicago-based New York Stock Exchange operator Comex, CME Group, announced another increase in margin requirements for gold futures – the second increase this month.
The increase in margin requirements has led to massive sales in the gold market in recent days. Silver also suffered, but not as much as in May this year, when the CME group also raised margin requirements for silver futures. This time, the long-term outlook for silver looks positive.
For the first time this month, the CME group raised its gold futures margin requirement to $ 7,425 per 100-ounce contract on August 22, up 22%. And on August 24, another increase in margin requirements was announced to $ 9,450 per 100-ounce contract, an increase of 27%. Thus, many speculative investors had to close their positions after the CME Group announced its decision, as many of them could not guarantee that they had sufficient funds to trade. The sale of gold positions by speculators caused gold prices to fall to $ 1,750 per troy ounce, a 9% decrease compared to the last 1917 price record per ounce. The CME Group has increased margin requirements for gold futures to reduce gold price volatility.
Successive increases in margin requirements for silver futures in May this year saw the price of silver fall 40% after reaching a record price of $ 50 an ounce. Since then, the price has been able to rise, but it is still far from its record. The same will happen with gold. Some warn that this is the “bursting gold bubble.” But affected investors, by contrast, are pleased with the price drop, as they will now be able to repurchase new physical gold positions at low prices.