CME Cuts Silver, Gold Futures Margins

New York (Nov 22)  Exchange operator CME Group Inc. (CME) reduced the amount of collateral required to trade the benchmark gold and silver futures contracts on Thursday.

CME, which owns the Comex division of the New York Mercantile Exchange, trimmed gold margins by 9.4% effective close of trading Friday, in a notice emailed Thursday afternoon.

Speculative investors in the benchmark 100-troy ounce gold contract can now deposit $7,975 to open a position and maintain $7,250 of that to keep that position overnight. That's down from the previous initial margin of $8,800 and maintenance margin of $8,000.

The initial and maintenance margin requirements for producers or consumers of gold have been reduced to $7,250 from $ 8,000.

Trading margins on the benchmark 5,000-ounce silver futures contract were cut 11%. Speculators must now deposit $ 11,000 to open a silver futures position and maintain $10,000 of that overnight, down from $12,375 initial margin and $ 11,250 maintenance margin previously.

The initial and maintenance margin requirements for silver producers and consumers have been reduced to $10,000 from $ 11,250.

The reductions in collateral requirements come against a backdrop of falling precious metals prices, with gold futures down 26% this year while silver prices are down 34%.

(Source: Tatyana Shumsky)