Silver Margin Hikes Begin... And Nobody Notices

You didn't think they'd forget did you. We predicted last week that the exchange would imminently hike silver margins. Well, our prediction was just a little off (and far more spot on than all those speculations about a weekend Greek restructuring and/or Chinese revaluation). As expected, the Shanghai Gold Exchange just announced it had raised the level of deposit required for its silver forward contract by 3 percent and may roll out further measures to curb excessive speculation and manage price volatility. According to the SGE, margins on its silver [Ag (T+D)] forward contract would be raised to 15 percent from April 25 compared with the previous 12 percent, according to a notice posted on its website. Silver did not even pretend to react on the news. And the upcoming silver hike by the COMEX will have absolutely the same effect.

From Reuters:

The SGE also it would raise from Tuesday the daily price limit for the contract, which has a lot size of one kilogram, to 8 percent over or under the previous session's settlement from the previous 7 percent.

"Should the market continues to show signs of overheating, the exchange will implement other measures such as raising the deferred rates to improve risk controls," it said.

The SGE's silver forward contract has soared in recent months in line with the meteoric rise in the U.S. silver futures contract. It was up 5.5 percent at 10,652 yuan ($1,637) a kilogram at 0624 GMT, bringing its gains so far this month to 33.6 percent.

h/t Steve