CME keeps Gold margins steady on rising volatility
CME Group Inc. (NYSE:CME) did not raise collateral requirements for Gold futures Thursday despite volatility reaching its highest level since August 24, when the CME last raised margins requirements.
Margin adjustments are based more on volatility rather than price, a CME spokesman said.
The Chicago Board Options Exchange Gold Volatility Index (GVZ) hit a high of 32.93 Thursday. The measure, like the CBOE's Volatility Index (VIX), tracks the market's expectations for swings in Gold over the next 30-days.
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The index set a recent high at 34.42 on August 24the, the same day CME raised Gold trading margins. At the time, the exchange operator increased by 27% the amount of money traders must put up to open a position in the benchmark 100-troy-ounce Comex Gold futures contract.
Speculative investors in the benchmark contract currently must put up $9,450 to open a position and maintain $7,000 of that to keep the position overnight.
Gold traders have been concerned that CME may again raise Gold margins as Gold prices have seen larger price swings and wider trading ranges in recent days.
Gold for Dec delivery, the most actively traded contract, settled +39.90, or 2.2%, at 1,857.50 oz on the Comex division of the New York Merc Thursday.
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.