On Friday, the CME Group raised margin requirements on precious metals, effective Monday. The increase in initial margin requirements reflects the sustained surge in volatility observed across the precious metals space. The 100oz gold contract and the 5,000oz silver contract will have initial margin increased from 5% and 9% as of 13th of January to 8% and 15% (platinum is also set at 15%). While the sharp fall in prices on Friday will act to cushion the dollar value of the extra margin requiring to be posted, my chicken scratches suggest we are looking at an increase in margin required of about 45% for gold and about 22% for silver after adjusting for the price fall. It’s hard to see how this won’t lead to further position liquidation and that means net selling of precious metals and a likely further price correction.