CME Margin Requirements for Gold Have Changed...again

Is a gold bottom forming?

Pinnacle Digest writes:  Despite gold finishing down 1.9% in overseas trading this week, there is evidence developing that a bottom is forming for the precious metal. Although India demand for gold is still down (the world’s largest consumer gold market), the rest of Asia has been picking up the slack.

After a long drawn out battle, and with US speculators cutting their bullish gold exposure by two-thirds since August of last year, the CME has stepped in. The CME has cut margin downpayments for gold, which is the second since February. Everyone remembers what happened to the price of gold last year when the CME raised margin requirements repeatedly over the span of a couple weeks. Well, now they have actually made a move that is bullish for gold, by lowering margin requirements.

"Margin reductions tend to have a less immediate impact on prices than margin hikes," says ANZ Bank's commodity desk in a note.

"Nevertheless, the reduction is likely to be mildly supportive going forward."

Click here to read Adrian Ash’s article on the fundamentals influencing gold right now.