As mentioned earlier, the Shanghai Gold Exchange 20% hike in silver margins at approx 2am induced a capitulation sell-off in silver down to $26.
For those unable to read Mandarin, we would like to thank Google Translate for its assistance:
On the adjustment of silver Ag (T + D) ratio and price limits margin contract notice
September 26, 2011:
Silver Ag (T + D) contract close on September 23 sealed limit. According to “Shanghai Gold Exchange Risk Control Measures” of the relevant provisions, such as Ag (T + D) contract on September 26 日 (周一) close to limit the same direction (ie, a second consecutive unilateral City), end of the day from the date of liquidation from the Ag (T + D) contract margin rates from 15% to 18%, the next trading day Ag (T + D) contract price limits range limit from 12% to 15%.
Please hold the contract to members and customers well in advance to prepare the corresponding margin calls.
Shanghai Gold Exchange
September 26, 2011