Gold Shifts Lower as CME Raises Margin Requirements
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Gold is seeing some selling pressure Thursday morning as CME Group (NYSE: CME) announced an increased margin requirement on futures contracts, effective this morning.
The company raised margin requirements by 22 percent, meaning investors and speculators will now need to keep a minimum of $7,425 on deposit per contract, up from $6,075 prior to the switch. An entire list from the release can be read here.
In addition, the margin for hedging gold increased 22 percent from $4,500 to $5,500 per contract.
With gold down about $21.90 to $1,762.4 per ounce, about 1.2 percent for the session, the news might solidify gold's current role in the market as one of the top ways to hedge long stock positions. Others contend the news hasn't been fully digested, and some might close out positions as the cost to hold gold increases.
Gold hit an all-time high of $1817.6 per ounce on the Comex Wednesday.
The company raised margin requirements by 22 percent, meaning investors and speculators will now need to keep a minimum of $7,425 on deposit per contract, up from $6,075 prior to the switch. An entire list from the release can be read here.
In addition, the margin for hedging gold increased 22 percent from $4,500 to $5,500 per contract.
With gold down about $21.90 to $1,762.4 per ounce, about 1.2 percent for the session, the news might solidify gold's current role in the market as one of the top ways to hedge long stock positions. Others contend the news hasn't been fully digested, and some might close out positions as the cost to hold gold increases.
Gold hit an all-time high of $1817.6 per ounce on the Comex Wednesday.
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