Gold and silver prices plunge after CME margin increase…related stocks also hit
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- Reported that gold and silver prices plunged due to the Chicago Mercantile Exchange (CME)'s announcement of a margin increase.
- As a result, major precious metals-related stocks such as ITCEN Global, Poongsan, and Korea Zinc were recording concurrent weakness.
- Analysts said the CME's margin increase prompted profit-taking on precious metals that had been on an uptrend since the start of the year.
- The article was summarized using an artificial intelligence-based language model.
- Due to the nature of the technology, key content in the text may be excluded or different from the facts.
Precious metals-related stocks are showing weakness. After the Chicago Mercantile Exchange (CME) sharply raised margin requirements for precious metals futures trading, gold and silver prices plunged.
As of 9:22 a.m. on the 30th, ITCEN Global is trading at 29,300 won, down 2,600 won (8.15%) from the previous day.
This stock operates the Korea Gold Exchange and has shown a pattern of increased volatility when precious metal prices swing.
Poongsan and Korea Zinc are also down 5.9% and 3.72%, respectively.
Poongsan, famous as a defense company that makes various types of ammunition, is involved in copper and brass materials, so investment sentiment appears to have worsened on the logic that its earnings could be linked to precious metals.
Korea Zinc can recover gold and silver during the zinc and lead smelting process, so it is linked to precious metal price fluctuations.
Other precious metals-themed stocks such as TKG Aegang (-1.97%), Elcomtec (-1%), and MK Electronics (-0.6%) are also weak.
This is the aftermath of the drop in gold and silver prices. Gold futures traded overnight on the CME at $4361.2 per ounce, plunging 4.16% from the previous day ($4550.4). Silver futures also fell to $72.122, down 11.68%. The CME Group's increase in margin requirements appears to have spurred profit-taking on precious metals that have sharply risen in price this year. The CME announced on the 26th that it would raise margin requirements for various metal futures contracts, including silver and gold, starting on the 29th (local time).
Han Kyung-woo Hankyung.com reporter case@hankyung.com
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