MCX, NSE withdraw additional margins on gold and silver futures as bullion volatility eases

Gold

• MCX and NSE withdraw extra margins on gold, silver futures
• Move follows reduced volatility in bullion markets
• Lower margins may boost trading and liquidity in futures

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The Multi Commodity Exchange of India and the National Stock Exchange of India on Thursday withdrew the additional margins imposed on gold and silver futures contracts earlier this month, signalling a moderation in volatility across the bullion market.

MCX said the 3 percent additional margin on all gold futures contracts and the 7 percent additional margin on all silver futures contracts have been removed with effect from February 19, and asked clearing members to take note of the change.

In a similar move, NSE Clearing Limited said the additional margins of 3 percent on gold futures and 7 percent on silver futures, imposed on February 4, will also stand withdrawn from Thursday, asking members to suitably adjust their positions.

• Also read | Spike in EM, gold ETF inflows signals rising speculation, may have macro implications for Indian economy: Kotak

The exchanges had introduced the additional margins as a risk management measure after sharp and rapid price movements in precious metals earlier this year. Gold prices had surged nearly 35 percent in January, prompting concerns around heightened volatility and leveraged positions, before cooling off by around 15 percent since then.

With bullion prices correcting and market conditions stabilising, the rollback of additional margins lowers capital requirements for traders, potentially improving participation and liquidity in domestic gold and silver futures. The move is expected to ease trading costs for both hedgers and speculative participants.

The decision also mirrors a broader global trend of exchanges actively recalibrating margin requirements in response to extreme price swings in precious metals. Late last month, CME Group had raised margins on Comex gold and silver futures following one of the steepest declines in bullion prices in decades.

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