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.


From MarketWatch:

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.

  1. lonerangersilver says:

    I had a feeling that the deal Hong Kong reached with NY to allow them to trade under their new comex was to do their bidding. We must remember that the Chinese don't want to see the dollar go down and now PMs that they own. They need the dollar up so commodities they import are cheaper including oil they must import. So we can expect a lot of cooperation with the banksters,

  2. So which is it, up or down or no change?

    SHANGHAI, May 13 (Reuters) – The Shanghai Gold Exchange (SGE) will cut silver margin requirements to 18 percent from 19 percent from May 13 settlements if there is no sharp movement in prices, it said on Friday.

    News of the margin decrease helped push the SGE silver forward contract up by 2.4 percent to close at 7,845 yuan ($1,207) per kilogram.

    Trading volumes for the contract have surged. According to data from the SGE, volumes rose 3,043 percent from the start of the year to 2,256,280 kg on Friday.

    "I think the lowering of the cost of trading could have helped in bringing silver investors back into the market today," said Ong Yi Ling, analyst with Phillip Futures.

    The SGE has hiked margin requirements for its silver forward contract five times since April 25 in order to curb volatility in the market. [ID:nL3E7GC2Q6]

    "Silver is now the most speculated metal and any lowering of margins will lure more investors back," said Hong Kong-based physical gold dealer Ronald Leung.

    The exchange also said it would keep daily price move limits unchanged, after lifting them to 13 percent on Thursday from 10 percent set on May 9.

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