Glencore strikes deal to test copper technology at Chilean mine
Glencore’s Lomas Bayas mine agreed to begin on-site testing at scale of a leaching process developed by Ceibo.
Gold for December delivery fell more than $50 to $1,710 an ounce in afternoon trade in London on Thursday, bring its losses since the record high of Monday to 10%, the worst slump since March 2008.
On Wednesday, the Chicago stock exchange operator CME followed a move by the Shanghai Gold Exchange by increasing the margin requirement as a way to “ensure adequate collateral coverage.” The minimum cash deposit to borrow from brokers to trade gold futures will rise 27% to $9,450 per 100-ounce contract at the end of today. Silver slumped as much as 35% in London in about three weeks from its April 25 record of $49.79 an ounce after CME announced margin increases.
Adjusted for inflation gold record-setting run this month did not breach the 1980 peak of $850/oz which translates to around $2,400 in today’s dollars. Then as now gold was sought after because of its inflation-beating qualities and safe haven status amid Russia’s war in Afghanistan and geopolitical tensions following the Iranian revolution.
MarketWatch quotes Commerzbank analysts: “Speculative financial investors are clearly closing long positions on a large scale at present, after the CME Group has increased the margin requirement for gold futures.”
Bloomberg quotes economist Dennis Gartman: “In our opinion the margin is not nearly high enough yet. Proper margining would seem to be closer to $15,000 per contract, for given the volatility that exists presently the exchange needs to protect itself and its clients from the possibility that a large speculator or two or three cannot put the exchange into jeopardy.”
