CME Group, the operator of the Chicago exchange, has implemented a major change to the way trading margins are calculated for precious metals futures, following the record-breaking surge in gold and silver prices this week. The exchange has shifted from a fixed dollar-based margin system to one based on a percentage of the contracts’ notional value.
The exchange said the new system took effect after the close of trading on Tuesday, following what it described as a routine review of volatility levels. The change applies to gold, silver, platinum, and palladium contracts, amid persistently high market volatility.
End of the Fixed-Dollar Margin System
CME explained that the previous system, which set margins at fixed dollar amounts, was no longer able to keep pace with the rapid price advances in precious metals, as it required frequent manual adjustments amid widening price swings.
Gold reached $4,568 per ounce on January 12, entering what analysts describe as a “price discovery” phase with no clear technical resistance levels ahead. Meanwhile, silver prices jumped by around 20% in just the first two weeks of 2026, prompting CME to raise margins several times over the past year as speculative activity intensified.
In a notice to clearing members, CME said it had “previously set margins for Gold, Silver, Platinum and Palladium based on a dollar amount,” but “with this change, CME will be setting margins for Gold, Silver, Platinum and Palladium based on a percentage of notional value.”
New Margin Requirements
Under the new framework, maintenance margin requirements for gold futures are set at 5% for standard accounts and 5.5% for higher-risk accounts. Silver margins stand at 9% and 9.9%, respectively.
Platinum margins are also set at 9% and 9.9%, while palladium requires margins of 11% for standard accounts and 12.1% for higher-risk positions.
The percentage-based system allows margin requirements to automatically adjust upward or downward in line with price movements, reducing the need for frequent manual changes. CME made at least three margin adjustments during the fourth quarter of 2025 alone under the old dollar-based system.
Possible Short-Term Pressure
Christopher Wong, a senior market strategist at Oversea-Chinese Banking Corp., told Bloomberg that the move “may temporarily weigh on precious metals prices” as traders adjust to higher collateral requirements at current price levels.
He added that while the new system should reduce the need for repeated adjustments in the future, CME could still raise the margin percentages themselves if volatility exceeds historical norms or if unexpected events occur.
Record Activity and Global Volatility
Clearinghouses such as CME require brokers to post daily cash margins to cover potential losses on client positions, a mechanism that becomes especially critical during periods of sharp volatility, when daily price moves can exceed 5%.
At the same time, CME has continued to expand its metals business, supported by rising trading volumes in emerging markets. The exchange opened a Dubai office last year as Middle East trading activity increased, alongside strong participation across multiple time zones from both institutional and retail investors.
Federal Reserve Concerns Boost Safe-Haven Demand
The surge in precious metals prices goes beyond typical seasonal factors. Concerns have grown over the independence of the Federal Reserve following reports of a criminal investigation involving Fed Chair Jerome Powell. A weaker U.S. dollar and expectations of further interest rate cuts have also supported prices, while silver faces additional volatility amid speculation over potential U.S. import tariffs.
The new percentage-based margin system aligns with approaches used for other highly volatile asset classes, where fixed dollar margins quickly become outdated during strong trending markets. CME processes millions of gold, silver, platinum, and palladium contracts each month across its platforms, amid one of the most active and volatile periods the precious metals market has seen in years.
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