Gold, silver gain amid rout in global stocks, CME Group hiking margin requirement

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Representations of virtual cryptocurrencies are seen in this illustration taken on November 28, 2021. — Reuters/File
Representations of virtual cryptocurrencies are seen in this illustration taken on November 28, 2021. — Reuters/File

Gold rose, and silver was gripped by volatility on Friday amid a rout in global stocks, while US exchange operator CME raised margins on precious metals for a third time this year to mitigate risks.

Spot gold rose 2.3 per cent to $4,879.45 per ounce by 05:52am GMT (10:52am PST), and was up 0.3pc for the week. US gold futures for April delivery added 0.2pc to $4,897.20 per ounce.

Spot silver was up 3.8pc at $73.91 an ounce on the day after falling about 10pc during early Asia trade to below the $65-level, which is a more than 1-1/2-month low. It had plunged 19.1pc in the last session.

For the week, the white metal was down more than 13pc after shedding 18pc last week, its biggest weekly fall since 2011.

China’s sole silver futures fund slumped by its 10pc daily limit on Friday, its sixth straight session of decline.

“There’s all kinds of evidence that risk sentiment in general is weakening. In this environment, gold is kind of holding its own and silver is caving in under the risk-off,” said Ilya Spivak, head of global macro at Tastylive.

Global equities extended losses into a third session as a selloff on Wall Street intensified, with precious metals and cryptocurrencies gripped by wrenching volatility.

“The correction in gold and silver prices came at the right time, just before Chinese New Year. So we could see more buying by Chinese consumers,” said ANZ analyst Soni Kumari, adding that near-term volatility can continue until some unwinding of weak positions.

CME Group hiked margin requirements for gold and silver contracts on Thursday as the world’s largest commodities exchange seeks to mitigate risks associated with heightened volatility.

Spot platinum added 0.4pc to $1,993.95 per ounce after hitting an all-time high of $2,918.80 on January 26, while palladium gained 2.2pc to $1,651.74. Both were down for the week.

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