Gold Price: The Gold price is rising rapidly. But there is a some relief about the price today Wednesday. The price fell sharply. On the other hand, this sharp rise in the gold-based ratio is not just a number. It is a sign of changing the balance within the market. At the same time, another news is coming. Apart from this, news agency Bloomberg says that the Shanghai Gold Exchange has taken a big decision. The margin on some gold contracts will be increased to 13%.
Decisions will be implemented from Friday- Shanghai Gold Exchange (SGE) has announced to increase the margin on some gold trading contracts to 13% from Friday. Currently this margin is 12%.
Gold prices have seen huge volatility in recent days. This move by SGE is to maintain stability in the market and control risk. This rule will come into effect after settlement (i.e. from Friday). What is margin – Margin in trading is the amount that the trader has to deposit in advance. When gold prices are very volatile, the exchange protects against risk by increasing the margin. Increasing the margin may affect the trading ability of small investors.
Now the question is, what could be its effect? Participation in trading may decrease slightly. But this may bring short-term stability in the market. There may be some pressure or stagnation in gold prices Overall – This decision of Shanghai Gold Exchange is a defensive move to protect the gold market from excessive speculative activities and risks. Investors will now have to trade with more capital and evaluate the risk carefully.
This decline is being seen in the domestic market along with the international market. On Wednesday, the price of gold came down to Rs 2700 per 10 grams. After seeing such a huge decline in a single day, customers are wondering whether to buy gold now or wait more to buy it.