GOLD PRODUCTION MAY PLUNGE 10%, SHANGHAI SLASHES GOLD & SILVER MARGIN NEARLY IN HALF!
SilverDoctors.com
JUNE 5, 2013
The Shanghai Futures Exchange has cut its gold and silver margin requirements. The bourse will cut margin requirements for gold and silver futures to 4% from 7%, according to amended trading rules posted on its website. Trading limits for silver and steel rebar futures will be lowered to 3% from 5%, the exchange says. The amendment will go effect on June 25.
The recent 22% decline in gold prices may lead to a substantial drop in gold production. During the 26% plunge in gold prices in 2007-08, gold production fell by 9.4%. Balance sheets in much of the gold mining sector are much worse than they were in 2007 and this may also force production cutbacks from the major producers, while growth from junior miners may struggle given the dire financing backdrop.
This will support gold in the long term.
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