Silver fell by 2%, today, Tuesday, after being near its highest level in 8 years in the previous session, as the Chicago Mercantile Exchange’s margin hike caused investors to take profits.
Silver in spot transactions fell 1.6 percent to $ 28.52 an ounce, by 05:35 GMT, after it jumped 7.3 percent to reach its highest level since February 2013 at $ 30.03 on Monday, when individual investors flocked to the market after calls on social media the prices.
The Chicago Mercantile Exchange raised the hedging margin for silver “COMEX 5000” by 17.9 percent yesterday.
“The moves of the Chicago Mercantile Exchange to increase silver trading margins and discourage high speculative behavior in the market stimulated some profit taking,” said Kyle Roda, market analyst at IG Markets.
Margins are deposits imposed by exchanges to reduce the risk of default while investors trade in the futures markets. They are usually raised during times of price volatility.
The mass trading of individuals that began last week led to a rush of global dealers to obtain bullion and coins to meet demand, while also prompting the US Commodities Regulatory Authority to monitor the market.