MCX raises margin in view of US elections

If Trump wins, gold is expected to see a sharp jump as market sees policy uncertainty

Multi Commodity Exchange of India (MCX) has increased margins on its top-traded contracts in precious metals and energy segments from Wednesday, in view of the US elections. 

The  close contest between Donald Trump and Hillary Clinton could result in huge volatility in commodities especially gold, silver, crude oil and natural gas. 

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

The MCX issued a circular on Tuesday levying additional margin of two per cent with effect from November 9 in the gold (all variants), silver (all variants), crude oil (all variants) and natural gas. The circular said: “The Exchange shall review the volatility over the next few days and then levy further additional margin or remove the additional margin already levied.”