Investing.com – Gold futures were down for the first time in five days on Thursday, easing off the record high after a margin increase by the CME Group on gold futures prompted some investors to sell their positions and lock in gains.
On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,784.45 a troy ounce during early European trade, dipping 0.34%.
Gold prices rose to a record high of USD1,815.65 a troy ounce earlier, the seventh record high in the past eight sessions.
The CME Group, operator of the Comex raised the amount of cash that traders must deposit for speculative positions by 22%, it announced late Wednesday.
The CME increased the so-called initial margin to USD7,425 per contract from USD6,075 per contract, pushing small investors out of the gold market as it raises the cost to trade a futures contract.
The margin for hedging will also increase 22% to USD5,500 per contract from USD4,500.
Despite the pullback, gold prices remained well-supported amid fears the euro zone’s debt crisis could spread to the region’s banking sector.
Concerns over the health of major French lenders, particularly Societe Generale, as well as rumors of an imminent French sovereign debt downgrade rattled investors’ confidence on Wednesday, leading to sharp losses in Europe and on Wall Street.
Rating agencies Moody’s, Standard & Poor’s and Fitch’s later reaffirmed France's top-tier AAA credit rating and said its outlook was stable.
Meanwhile, global financial service provider Commerzbank raised its average gold price forecast for the third and fourth quarter of 2011 to USD1,700 an ounce and USD1,800 an ounce respectively.
"The yellow metal is viewed not only as a safe haven and store of value, but increasingly as an alternative currency too," Commerzbank said.
Elsewhere on the Comex, silver for September slumped 0.95% to trade at USD38.91 a troy ounce, while copper for September delivery soared 2.85% to trade USD4.008 a pound.
On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,784.45 a troy ounce during early European trade, dipping 0.34%.
Gold prices rose to a record high of USD1,815.65 a troy ounce earlier, the seventh record high in the past eight sessions.
The CME Group, operator of the Comex raised the amount of cash that traders must deposit for speculative positions by 22%, it announced late Wednesday.
The CME increased the so-called initial margin to USD7,425 per contract from USD6,075 per contract, pushing small investors out of the gold market as it raises the cost to trade a futures contract.
The margin for hedging will also increase 22% to USD5,500 per contract from USD4,500.
Despite the pullback, gold prices remained well-supported amid fears the euro zone’s debt crisis could spread to the region’s banking sector.
Concerns over the health of major French lenders, particularly Societe Generale, as well as rumors of an imminent French sovereign debt downgrade rattled investors’ confidence on Wednesday, leading to sharp losses in Europe and on Wall Street.
Rating agencies Moody’s, Standard & Poor’s and Fitch’s later reaffirmed France's top-tier AAA credit rating and said its outlook was stable.
Meanwhile, global financial service provider Commerzbank raised its average gold price forecast for the third and fourth quarter of 2011 to USD1,700 an ounce and USD1,800 an ounce respectively.
"The yellow metal is viewed not only as a safe haven and store of value, but increasingly as an alternative currency too," Commerzbank said.
Elsewhere on the Comex, silver for September slumped 0.95% to trade at USD38.91 a troy ounce, while copper for September delivery soared 2.85% to trade USD4.008 a pound.