Gold retreats from all-time record after CME margin increase

Gold retreated today after setting a new record at $1814.17 per ounce, cutting some of the huge gains recorded in the past sessions, after CME group, the world's largest futures market, raised margins for gold futures by 22.2%, while Shanghai Gold Exchange, China's largest physical gold market, will also raise margins requirement for gold contracts to 11%.

Demand for gold as a safe haven rallied since June, because investors are holding the shiny metal to protect their wealth especially after the huge losses seen across the board, the heavy fluctuations and volatility in the market, which lead CME group to raise the margins for gold futures in order to ease demand and to put an end for the long upside journey, trying to affect the appeal of the shiny metal as a haven by making it less attractive.

Gold eased today after CME raised margins for gold contracts indeed, but the shiny metal is still trading high, while this act will not be sufficient to prevent gold from continuing the upside journey amid the downbeat growth outlook and the deepening debt crisis in Europe, where since June the shiny metal gained big time on the sovereign debt crisis, the downbeat outlook for growth along with the slowing pace of recovery worldwide and finally rising inflationary threats.

Moreover, the Bank of England released the inflation report yesterday, explaining that the bank sees inflation over the short-term could reach 5%, but then may ease during 2012 and 2013, which boosted the current demand for gold as a hedge against inflation, supporting the appeal for gold as a haven.

Spot gold is fluctuating heavily after CME announcement, and is currently trading around $1789.20 per ounce after the opening in the Asian session at $1793.00. The yellow metal recorded the high of $1814.87 and the low of $1775.52 per ounce.

Among other precious metals, silver also fluctuated today after the opening in the Asian session, and is currently trading below the opening level, due to the heavy fluctuations and volatility that are dominant in the market, investors' appetite for speculation eased in the time confidence remains fragile and pessimism is seen across the board.

Spot silver was a little eased after the opening of $39.23 per ounce; however the metal recorded the high of $39.81 and the low of $38.59, and is currently hovering around $39.14 an ounce.

Platinum is still trading lower than the yellow metal, despite the incline seen today, where after the opening of $1762.00 per ounce, platinum declined to set the low of $1751.00; however, the metal surged to record the high of $1779.00 per ounce and is currently hovering around it.