April 25, 2011 / 6:49 AM / in 6 years

Shanghai Gold Exchange raises margins on silver forward contract

SHANGHAI, April 25 (Reuters) - The Shanghai Gold Exchange (SGE) said 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.

The SGE said margins on its silver [Ag (T+D)] forward contract had been raised to 15 percent from April 25 compared with the previous 12 percent, according to a notice posted on its website (www.sge.sh).

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.

The most active U.S. silver futures contract SIcv1 surged by more than 5 percent to a 31-year high at $48.51 an ounce on Monday, in a broad rally in precious metals. [ID:nL3E7FP0EP]

There are 35.2 ounces in one kilogram.

SGE also offers two spot contracts which trade silver of 99.90 percent and 99.9 percent purity. ($1 = 6.507 yuan) (Reporting by Fayen Wong; Editing by Jonathan Hopfner)

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