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CME Group Inc. hiked margin requirements for gold and silver futures a day after their sharpest selloff in five months.
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Increasing volatility means investors could experience larger fluctuations in the size of their accounts, and higher margin requirements help the exchange's clearinghouse ensure trade obligations are met.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GLD | SPDR GOLD SHARES TRUST – EUR ACC | 182.06 | +2.12 | +1.18% |
| SLV | ISHARES SILVER TRUST | 24.14 | +0.81 | +3.47% |
Gold speculators must pay an initial margin requirement of $10,230 to open a position in a contract and $9,300 to retain that position, up from $9,570 and $8,700, respectively. Hedgers and members are required to meet initial margin and maintenance margin requirements of $9,300, up from $8,700.
Meanwhile, silver speculators must pay an initial margin requirement of $14,575 and a maintenance margin of $13,250. Hedgers and members must pay initial and maintenance margins of $13,250.
Margin requirements are larger for silver than for gold because of the notoriously volatile nature of its price due to lower liquidity and its supply and demand dynamics.
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Front-month Comex gold futures plunged $91.80, or 4.91%, to $1,932.60 an ounce on Tuesday, while front-month Comex silver futures sank $3.212, or 11%, to $26.037 an ounce. Both drops were the largest on a percentage basis since mid-March.
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