Shanghai Gold Exchange cuts transaction size to limit price moves
By GCRU Gold News on Thursday, December 29 2016, 02:01 - Permalink
Shanghai Gold Exchange, the world's biggest physical bullion exchange, said on Wednesday it will curb the amount of gold investors can trade at one time, a move analysts said would limit institutional investors' influence on prices.
The exchange said in a statement it will halve its limit on transactions to 500 kg on some spot gold contracts starting Jan. 1. It did not give a reason for the move and the exchange did not answer calls seeking comment.
The new limit, which would be worth more than $20 million based on current prices, suggests the move is targeted at institutional investors, such as banks and hedge funds.
The move does not affect the amount traders can sell or buy in any one day, but it would likely force traders to carry out big transactions in multiple moves, reducing the potential for "fat finger" erroneous trades or preventing big investors from carrying out rapid-fire buying or selling to influence prices.
Shanghai Gold Exchange cuts transaction size to limit price moves