Margin Rise Won't Alter Golden Rule |
| Wall Street Journal - Aug 11, 2011 |
Margins paid on gold contracts on the world's largest futures exchange increased by 22% Thursday night.
But analysts say it is unlikely to have the same impact on the market's inexorable rise as similar margin increases placed on silver earlier this year, which saw the "devil's metal" drop by a third across seven trading days.
The price of gold raced up more than $300 an ounce, or almost 21%, since the start of July amid turmoil in the world financial markets. On Thursday, gold posted a fresh record of $1,814.89 an ounce in the spot market, and analysts have now revised their forecasts to as high as $2,500 by the end of the year. On the Comex front-month contract, gold hit a record of $1,813.50 an ounce Wednesday night.
Following this surge in prices, the Chicago Mercantile Exchange increased margin requirements on its most heavily traded contracts, the Comex 100 gold futures.
Gold fell Thursday in New York. The front-month contract for August delivery settled at $1,748.80, down $32.50, or 1.8%, snapping a three-day winning streak.
Read Full Article from Wall Street Journal
- Posted: 2011-08-11 20:49:14
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