Shanghai exchange sets trading limits on gold, copper futures as prices rally

The most-traded SHFE gold contract hit a fresh record of 560.88 yuan ($77.55) per gram on Wednesday, up 16% from the beginning of the year. (Representative image)

The Shanghai Futures Exchange (SHFE) will impose trading limits on its gold and copper contracts, it said on Wednesday, following sharp price rallies by both metals.

The exchange set the maximum intraday position opening volumes of gold at 2,800 lots and copper at 2,000 lots. The change will start from April 12.

The most-traded SHFE gold contract hit a fresh record of 560.88 yuan ($77.55) per gram on Wednesday, up 16% from the beginning of the year.

The record followed a global price uptrend amid a favourable mix of emerging inflationary risks and geopolitical tensions which have underpinned the safe-haven metal.

The most-traded SHFE copper contract SCFcv1 traded as high as 76,860 yuan per metric ton on Wednesday, the highest on record.

A positive demand outlook for copper, a metal key to the energy transition, and the prospect of supply cuts by Chinese smelters amid raw material shortages, boosted investor sentiment.

The contract has seen a spike in open interest and trading volumes in recent weeks.

($1 = 7.2328 Chinese yuan renminbi)