Shanghai Gold Exchange To Adjust Margin, Trading Limits For Holiday Break

SHANGHAI, May 29 -- The Shanghai Gold Exchange said Monday that it will temporarily raise its limits on trading margins and price movements for spot gold and silver on June 3 ahead of the Dragon Boat Festival public holiday, and reset them on June 7 after the break.

The minimum margin for trading of gold contracts will be raised to 12% of the value of the contracts from 10%, while margin requirements for silver will be increased to 17% from 15%, starting at the close of business Thursday, the last trading session before the holiday, the exchange said on its website.

The margin requirements will be reset to 10% and 15% at settlement June 7 if trading on that day doesn't touch the upper or lower price movement limits.

The upper and lower price limits for gold and silver will be widened to 9% and 12% June 3, and will be reset to 7% and 10% June 8 if trading the previous day doesn't hit upper or lower limits.

The spot gold and silver bourse usually makes such changes ahead of long holidays, given the chance of higher volatility due to movements in global precious metal markets while the Chinese market is closed.