MCX raises margin in view of US election

MCX on Tuesday issues a circular levying additional margin of 2% with effect from November 9

Multi commodities exchange (MCX) has increased margins on its top traded contracts in precious metals and energy segments from November 9 in view of the US elections. Because the contest between Republican Presidential Nominee Donald Trump and Democratic Presidential Nominee Hillary Clinton is so close that any swift not expected by market could result in huge volatility in commodities especially gold, silver and crude oil and gas.

After the Federal Bureau of Investigation gave a clean chit to Clinton in private email case and surveys pointing to her improved chances, traders have become bearish on gold. The surprise element could be if Trump wins, gold is expected to see a sharp jump as market see policy uncertainty.

In view of this, the MCX on Tuesday issued a circular levying additional margin of 2% with effect from November 09, 2016 in the Gold (all variants), Silver (all variants), Crude Oil (all variants) and Natural Gas.

The circular issued on Tuesday to this effect says that the Exchange shall review the volatility over the next few days and then levy further additional margin or remove the additional margin already levied.