CHICAGO(Commodity Online): Accepting bullion customers long time demand, CME Group Inc announced the increase of the amount of bullion customers can post as collateral to $500 million from $200 million.
In a statement, CME the biggest operator of U.S. futures exchanges, said customers will be able to post more physical gold as performance bond collateral as of the close of business on Monday.
Performance bonds, or margin requirements, are money investors must put up to be able to trade futures contracts.
The exchange said that the change will allow market participants to better manage their risk and to take advantage of lower gold lease rates.
Analysts said the interest rate for gold is currently negative so this means that it is very cost efficient for a holder of gold to place it as collateral.
