Spot gold declined, extending its biggest plunge since February 2010, after CME Group Inc. increased margins on trading at its Comex unit for the second time this month. Gold turned sharply lower Thursday morning as risk aversion continued to subside in financial markets.
CME Group announced another increase in margin requirements to trade gold after the market close on Wednesday. On Wednesday, spot gold tumbled 3.6 percent on Tuesday after striking a record above $1,911 an ounce.
Prices rebounded as buyers picked bargains, trading up 0.7 percent to $1,841.79 by 0701 GMT. According to the Bloomberg, gold for immediate delivery slid as much as 1 percent to $1,742.31 an ounce before trading at $1,750.90 at 7:12 a.m. in Singapore. The price slumped 3.8 percent yesterday, the most since Feb. 4 last year. Futures fell 0.3 percent to $1,751.70 after plunging 5.6 percent yesterday, the most since March 2008.
"In a sense the decline is just subtracting the frothy increase (from the market)," said Mitsubishi analyst Matthew Turner. "That increase has been going on since around $1,600 an ounce, so it is hard to see where the bottom lies."
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