shanghai gold exchange installing lower max trade size

[cheka.]

might slow down the skype manipulation...but daily limit remains unchanged

http://www.reuters.com/article/us-china-gold-idUSKBN14I031

Shanghai Gold Exchange, the world's biggest physical bullion exchange, said on Wednesday it will curb the amount of gold investors can trade at one time, a move analysts said would limit institutional investors' influence on prices.

The exchange said in a statement it will halve its limit on transactions to 500 kg on some spot gold contracts starting Jan. 1. It did not give a reason for the move and the exchange did not answer calls seeking comment.

The new limit, which would be worth more than $20 million based on current prices, suggests the move is targeted at institutional investors, such as banks and hedge funds.

The move does not affect the amount traders can sell or buy in any one day, but it would likely force traders to carry out big transactions in multiple moves, reducing the potential for "fat finger" erroneous trades or preventing big investors from carrying out rapid-fire buying or selling to influence prices.

It may also drive up the transactions costs.

Turnover in the exchange has soared as Chinese retail investors' appetite for gold as a safe-haven investment has increased. In November, volume hit 3.4 million kg, the highest monthly total so far this year.

International prices are languishing close to their lowest for the year as institutional investors have sold the yellow metal in anticipation that the U.S. Federal Reserve will opt for more interest rate hikes next year. The Fed indicated this after raising rates on Dec. 14.

Higher interest rates discourage the buying of non-interest-paying bullion, which is priced in dollars.

The measures "will prevent a big amount of capital flowing out of the market at one time, and therefore prevent the gold price going down sharply in a short period of time," Xie Qingpeng, gold analyst at Guotai Jun’an futures.

Other major commodity exchanges in China this year have hiked transactions fees and margins as well as cut position limits on everything from rubber to coal to curtail rising prices.

[keehah]

Ongoing increasing of futures derivative contract access and margin requirements for retail traders in Shanghai Gold Exchange. Fourth largest bank in China is suspending precious metals derivative contracts for retail investors on August 15.

breakinglatest.news: Gold and silver prices tumble, many banks tighten precious metals business – Xinhua English.news.cn (https://www.breakinglatest.news/business/gold-and-silver-prices-tumble-many-banks-tighten-precious-metals-business-xinhua-english-news-cn/)
July 20, 2022
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cebnet-com-cn: Several banks tighten personal precious metal trading business (https://www.cebnet.com.cn/20220715/102820190.html)
[google translated]

source:China Securities Journal · China Securities Network 2022-07-15

The Industrial and Commercial Bank of China issued a notice a few days ago to adjust the personal precious metal trading business of the Shanghai Gold Exchange. A reporter from China Securities Journal found that since the first half of this year, many commercial banks, including Industrial and Commercial Bank of China, China Construction Bank, and Industrial Bank, have tightened their personal precious metal trading business to varying degrees. Specific measures include restricting new account opening, increasing the margin ratio, suspending Buy transactions and dissolution of agency relationships, etc.

Industry insiders pointed out that due to the recent fluctuations in the precious metal market and the increased uncertainty in the international financial market, in order to protect the rights and interests of investors, many banks have made adjustments to related businesses. Investors are advised to pay attention to changes in the international financial market in a timely manner, adjust investment positions appropriately, and effectively prevent risks

A number of banks adjust related business

A few days ago, the Industrial and Commercial Bank of China issued the "Notice on the Adjustment of Our Bank's Agency for Personal Precious Metals Trading on the Shanghai Gold Exchange". Since the closing and clearing on July 8, the standard transaction margin ratio of some contracts will be increased, and the differentiated margin will be adjusted simultaneously. In addition, from 9:00 on August 15th, the opening transactions of the Shanghai Gold Exchange's personal precious metal deferred delivery contracts and the buying transactions of the personal gold spot firm contracts will be suspended. The closing transaction and the selling transaction of the agency personal gold spot real contract are not affected.

Industry insiders told reporters that, according to the relevant regulations of the Shanghai Gold Exchange, the personal precious metal business of commercial banks on behalf of the Shanghai Gold Exchange mainly includes the deferred delivery of the spot and the firm spot contract business. , along with a margin system and a short-selling mechanism. At present, most banks suspend the personal precious metal trading business to open positions in deferred contracts and buy spot contracts, and some banks choose to close related businesses.

China Construction Bank has previously issued a relevant announcement saying that it will suspend the new opening transactions of the deferred contract varieties of the Shanghai Gold Exchange's personal precious metal trading business, and the closing transactions will not be affected; the purchase transactions of the spot contract varieties will be suspended, and the sell transactions will not be affected.

In addition, China Everbright Bank, Industrial Bank, Hua Xia Bank and other banks have also issued relevant business adjustment announcements one after another. Specific measures include restricting new account openings, increasing contract margins, suspending personal precious metal agency business or terminating the agency relationship.

In recent years, the bank's precious metals business has been gradually tightening. According to the reporter's incomplete statistics, since 2020, more than 20 banks have adjusted or suspended the precious metal-related business of personal accounts.

Market uncertainty increases

On July 6, the "Notice on Doing a Good Job in Recent Market Risk Control" issued by the Shanghai Gold Exchange mentioned that recently affected by international factors, global commodity prices have fluctuated sharply, and market risks have significantly increased.