* CME increases Comex 5000 Silver Futures margins by 17.9%
* Silver has not yet reached the top – analyst
* US commodities regulator monitoring silver market activity (updated prices) By Sumita Layek, February 2 (Reuters) – Silver fell more than 2% on Tuesday, retreating from an almost eight-year peak it hit in the previous session, as an increase in the margin of the Chicago Mercantile Exchange led investors to lock in profits. Spot silver fell 1.6% to $ 28.52 an ounce until 0535 GMT, after jumping 7.3% to reach its highest value since February 2013 at $ 30.03 on Monday, with investors retailers huddling in the market after calls on social media to raise prices. CME Group increased maintenance margins for Comex 5000 Silver Futures by 17.9% on Monday. CME’s measures to increase margins in silver trading and discourage highly speculative behavior in the market have led to some profit taking, said IG Market analyst Kyle Rodda.
Margins are deposits required by exchanges to mitigate default risks while investors trade in futures markets. They are usually increased in times of price volatility. The retail frenzy that started last week left global traders struggling for bars and currencies to meet demand, while putting pressure on the US commodities regulator to monitor the market. The fact that silver rose without similar spikes in other precious and industrial metals “suggests that it is a kind of outlier and, therefore, vulnerable to falling quite strongly,” said Edward Meir, an analyst at ED&F Man Capital Markets, but added that didn’t peak right now. Prices were also under pressure after some Reddit members pleaded with individual traders to avoid trading, as there are no solid silver short positions. Analysts expect prices to remain volatile in the short term. “It’s just wild market behavior with a low level of predictability,” said Rodda. Spot gold fell 0.2% to $ 1,855.76 an ounce. Gold futures contracts in the US fell 0.4% to $ 1,856.90. Platinum dropped 1.5% to $ 1,110.77, while palladium added 0.3% to $ 2,253.03. (Reporting by Sumita Layek in Bengaluru; edited by Krishna Chandra Eluri and Rashmi Aich)
Outside the USA +91 8061822693; Reuters messages: [email protected]))
Legal Notice: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes. It is not a request to make any exchange of goods, securities or other financial instruments. Kitco Metals Inc. and the author of this article are not responsible for losses and / or damages arising from the use of this publication.