While the Chicago Mercantile Exchange (CME) increased margin requirements 22% on U.S. gold futures positions effective Thursday at close of business, a report by ETF Securities says that the move is likely not indicative of a trend toward additional aggressive increases.
The report, "CME Hikes Gold Margins 22%—What Does it Mean for the Gold Price?" says current volatility makes it unlikely that gold will come in for the same aggressive treatment that silver got in May, when CME boosted margins five times, resulting in a sell-off and a subsequent drop in price.
Although there is concern in the markets that such could be the case, says the report, "on our calculations, based on current volatility, average gold margin requirements have the potential to be increased by up to another 15% or so, bringing total margin increases to around 38%, less than half the rise faced by silver futures investors in May."
