Gold: China getting ready for the gold price to jump up

The Shanghai Gold Exchange increases the required security and trading limits in the business with gold futures and warns traders to be sensible. The gold price has risen sharply recently.

Gold futures
This is known from the US commodity futures exchange COMEX. If the gold price fluctuates sharply or the price of the precious metal shoots strongly in one direction or the other, higher security deposits are required from futures traders. This is now also the case on the Shanghai Gold Exchange (SGE) – the largest gold trading center in China.

Margin increase
As reported by Market Screener, among others, the gold margins will be increased from 8 percent to 9 percent as of July 24, 2020. 9 percent of the trading position must therefore be secured with reserves in the trader’s account. And the trading limit has been raised from 7 percent to 8 percent. This is the maximum price movement of the futures gold price that is admitted to trading on the Shanghai Gold Exchange.

Warning to reason
They also appeal to the reasonableness of gold traders. One should invest rationally and control the scope of the positions “reasonably”, says the website of the SBU. The gold price in Chinese renminbi has risen by 20 percent since the beginning of the year. There has been an increase of 4 percent in the past seven trading days.