SGE Announces Second Margin Hike on Risk Concern

SHANGHAI, Aug. 23 (SMM) – Shanghai Gold Exchange (SGE) announced on August 23rd to raise forward gold contract margin to 12%, effective from end of trading hours on August 25th Thursday 2011. This is a second margin hike for gold deferred contract by SGE in August.

As gold price reported huge gains during recent period, investment risk rose due to increased market uncertainties. Gold price in China has risen by over 17% from RMB 334/gr to RMB 391/gr starting from August. SGE already announced a margin hike to 11% for gold deferred contract on August 11th.

Silver price in China also reported a nearly 5.8% gain starting from this week, which was responded by a SGE notice to put more energy on risk prevention, emphasizing measures including a margin hike, compensation rate adjustment for deferred contract, overdue fees as well as higher transaction fees if bigger fluctuation showed for silver prices.