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As prices shoot up, Shanghai Futures Exchange slaps limits on both gold and copper as contracts hit new highs
With the most-traded gold contract at a new high of $77.55 and copper contracts at its all-time peak, the Shanghai Futures Exchange slapped on trading limits.
Like most stock markets in recent days, gold and some other metals like copper have been seeing noticeable jumps in trading and rates. In fact, the movement has been of such nature that it has forced authorities to step in and take stock of what is happening in the trading platforms to cool down the frenzy. For that, they have deemed certain action as necessary to be taken today, even if it means a departure from business as usual just to make sure no more surprises are in store. Very much in this spirit, the Shanghai Futures Exchange (SHFE) today, has revealed that it will slap trading limits on its gold and copper contracts. It also revealed the reason why - due to the significant price rallies in both metals.
The exchange says that effective April 12, it has established maximum intraday position opening volumes for gold at 2,800 lots and for copper at 2,000 lots.
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Significantly, the most-traded SHFE gold contract reached a new high of 560.88 yuan ($77.55) per gram, marking a 16% increase since the start of 2024.
The global uptrend in prices is being driven by a combination of emerging inflationary pressures and geopolitical tensions, which have bolstered demand for the safe-haven metal, Reuters reports.
Even more notably, the most-traded SHFE copper contract surged to 76,860 yuan per metric ton today, reaching its all-time peak.
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Investor sentiment towards copper has been buoyed by a positive wolrdwide demand outlook, particularly due to expectations of supply constraints stemming from shortages in raw materials among Chinese smelters.
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Gold and copper are not the only two metals isolated for action. In fact, the Shanghai International Energy Exchange revealed plans to enforce trading restrictions on crude oil futures contracts. And this will commence on April 12, 2024. The exchange said the maximum intraday position opening volume for every contract has been set at 3,200 lots.
