Shanghai Raises Margins on Gold, Silver Amid Fed-Driven Market Frenzy
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COMEX gold futures surged past $3,800 an ounce on Tuesday, marking an 8% gain in September
The Shanghai Gold Exchange is raising margin requirements on gold and silver futures for the sixth time this year, moving to calm a market that has soared since the U.S. Federal Reserve cut interest rates for the first time in 2025.
The decision follows a record-breaking run for precious metals. COMEX gold futures surged past $3,800 an ounce on Tuesday, marking an 8% gain in September. Silver, meanwhile, hit $44.80 — its highest level since 2011 — rising 9% this month and more than 51% year to date.
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- The Shanghai Gold Exchange raised margin requirements on gold to 16% and silver to 19% following a surge in precious metal prices after the Fed’s first 2025 rate cut.
- COMEX gold futures exceeded $3,800/oz (up 8% in September), and silver hit $44.80/oz (up 9% in September, 51% year-to-date).
- The moves aim to manage default risk amid market volatility, holiday closures, and uncertainty about the Fed’s future rate policy.
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Who’s Who
- Citic Futures
- Zhu Shanying, an analyst at Citic Futures, commented on the US Federal Reserve's rate cut, stating it's just the beginning and the market hasn't fully priced in future rate cut expectations for 2026. Zhu also highlighted that growing disunity within the Fed damages the dollar's credibility, acting as a "long-term bullish factor for gold."
- Minsheng Securities
- Qiu Zuxue, the chief metals analyst at Minsheng Securities, shared his perspective on the Federal Reserve's decision, calling it a "trigger" for market changes. He emphasized that the underlying issue lies in confidence in the U.S. dollar and warned that U.S. fiscal expansion would further weaken the dollar's status.
- Bank of Hangzhou
- Bank of Hangzhou's capital operations center, specifically a team led by Wu Zemin, contributed to the analysis of the silver market. They highlighted a "delivery month squeeze," noting that silver's smaller trading volume compared to gold makes it more vulnerable to price squeezes during key futures delivery months like September.
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