Well, we now have confirmation for the reason for silver’s plunge throughout Asian trading. Marketwatch is reporting that the Shanghai Gold Exchange will hike silver margins to 19% effective May 13.
Move over “sub-prime” and “green shoots“, at this pace, “Silver Margin Hike” will be the catch phrase for 2011.
The Shanghai Gold Exchange said Thursday it will raise margin requirements for silver futures as part of risk-control measures, its third round of increases in less than a month, according to a statement posted on the exchange’s web site. Margin requirements will rise to 19% of a contract’s value from 18%, while the daily price limit for the one kilogram silver forward contract will rise to 13% from 10% above or below the previous session’s close. The new trading requirements will be effective from May 13. The exchange announced previous rounds of increases to margins and price limits on May 5 and April 25.