Shanghai exchange lifts price limits for gold, silver futures amid recent rally
China’s main commodities bourse is loosening the reins on precious metals trading after a blistering rally. The Shanghai Futures Exchange (SHFE) will expand the daily trading range for gold and silver futures to 14% from 12%, a move aimed at accommodating heightened volatility as prices surge to record levels.
In tandem with the wider bands, the exchange is also tightening risk controls for hedgers: margin requirements on hedging positions in gold and silver will rise to 15%, up from 13%. All changes take effect from the settlement on October 21.
The policy shift lands as bullion fever grips global markets. Investors have piled into safe-haven assets amid renewed trade frictions, growing expectations of U.S. interest rate cuts, and sustained central bank buying. That cocktail has propelled Chinese precious metals futures to fresh highs and intensified intraday swings.
On the day, the most-active Shanghai gold contract finished the daytime session up 3.82% at 999.8 yuan per gram, having briefly pierced the 1,000-yuan mark to hit an all-time high of 1,001 yuan. Silver followed suit, with its most-traded contract notching a record 12,366 yuan per kilogram. Both metals are up about 61% so far this year.
For context, the exchange’s adjustments effectively allow for wider price movement within a single session while ensuring additional collateral is posted for hedging strategies—an attempt to balance market liquidity with prudence during periods of sharp price acceleration.
The latest prices arrive against a currency backdrop where $1 equaled 7.1255 yuan. While the exchange’s mechanisms don’t dictate direction, the broader limits and higher margins reflect the reality of a market where momentum, macro uncertainty, and institutional demand are all pulling in the same direction.
What to watch next: whether the expanded limits temper intraday spikes by reducing the frequency of limit-ups, how higher margin demands influence hedging behavior among industrial users and financial institutions, and if the current wave of safe-haven interest sustains into year-end as policy expectations evolve.
