(Kitco News) - CME Group is raising margin requirements by 22.2% for trading gold futures on the Comex Division of the New York Mercantile Exchange.

In the same announcement, CME Group said it also is hiking margins for a number of U.S. interest-rate products, including 10-year notes, as well as some currency and stock-index futures contracts. The new rates will be effective after the close of business on Thursday.

For the full 100-ounce gold contract, the “initial” margin for new positions will rise to $7,425 for speculators from $6,075. Speculators’ “maintenance” margins for existing positions, as well as all hedge positions, will rise to $5,500 from $4,500.
Margins are also rising for smaller-sized gold contracts.

CME Group said the margin hikes were part of the “normal review of market volatility to ensure adequate collateral coverage.” Margins, or the collateral traders must up front to trade highly leveraged futures contracts, typically rise as price volatility increases.

Futures traders have been speculating lately that margin hikes in gold might be coming since volatility increased in recent trading days. The range for the Comex December contract on the last two business days was $60.80 and $64.80 an ounce.

The link to the complete CME Group announcement is below:
http://www.cmegroup.com/tools-information/lookups/advisories/clearing/files/Chadv11-279.pdf

By Allen Sykora of Kitco News; asykora@kitco.com

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