Germany’s Chancellor plans lithium deal with Serbia after Rio ruling
Olaf Scholz plans to visit Serbia this week to secure supplies of lithium that are critical for the nation’s energy transition and auto industry.
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.”
