The new trading year began yesterday with market participants pricing in new economic risk concerns directly impacting the price for gold and silvercontracts on COMEX. Our February gold contract was up 2.2% yesterday and continues to trend upward today, while our March silver contract rose 5.9% yesterday, and has fallen back some today. Both contracts rebounded after ending 2011 with several days of decline.
When such volatility occurs, we often get questions about how margin change decisions are made and about the process for delivery against metal contracts. In response to some of these questions, we published this fact sheet that details our margin policies.
Kim Taylor, President of CME Clearing, also wrote a post here last year on understanding margin changes that helps clear up some of the misinterpretations that happen when margin changes occur. And in a related post, John Labuszewski wrote about making sense of volatility.
Much of the changes in gold and silver can be traced to recent incoming economic data. However, if prices continue to fluctuate and questions about margins emerge, these resources provide a good place to find answers.
Patricia Cauley is the director of metals products at CME Group.
Check out the Article At CME Group’s ‘Open Markets’ Blog
— The Option Specialist