SGE to allow physical gold as collateral against its futures

Otmane El Rhazi from The Bullion Desk.

Shanghai Gold Exchange (SGE) will allow physical gold to be used as collateral against its futures contracts, it said.

From September 29, physical gold will be allowed to be used for up to 80 percent of margin value, the exchange said in a statement on Thursday.

“The new measure adds more financial functions to gold. It means that gold can be used as a sort of currency,” an analyst in Shanghai said.

The exchange will exempt members from gold collateral fees until the end of March next year, it said.

 

(Editing by Mark Shaw)

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