Gold’s has been utterly clobbered for the past two days. Yesterday price of gold got crucified down by 8.71%. Silver had also been razed down 12.48%
Part of that steep dive has been exacerbated by the raising of trading margin requirements from the CME and the Shanghai Gold Exchange.
From the Bloomberg:
CME Group Inc. (CME) increased the margin requirements on gold trading after prices plunged.The minimum cash deposit for gold futures will rise 19 percent to $7,040 per 100-ounce contract at the close of trading tomorrow, Chicago-based CME said in a statement. For silver, the minimum cash deposit was raised to $12,375 from $10,450.The CME’s Comex unit is making it more expensive for speculators to trade after gold fell the most in 33 years today, dropping to the lowest since February 2011, after prices entered a bear market last week. Silver, also in a bear market, slumped 11 percent today and extended the year’s loss to 23 percent.
From CityIndex.co.uk (bold original)
The plunge in gold and silver was also accelerated by reports that the Shanghai Gold Exchange may hike margins on gold and silver contracts to 12% and 15%. Margin hikes were carried out in 2011 by Comex in order to stabilize speculation, whereas an increase in Shanghai following violent price plunge may reflect the stability of the Exchange’s clearinghouse.
Intervening supposedly to “stabilize” gold-silver markets apparently backfired.
Yet two exchanges doing the same thing, as if they had been coordinated.
Such actions signify as the proverbial “kick a man when he is down” or may have been meant to ensure that gold-silver’s decline continues.
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