As gold bugs continue to flock to the market, China's largest gold exchange is taking action to prevent excessive volatility in the domestic gold and silver market. The Shanghai Gold Exchange will raise trading limits and margin requirements on its gold and silver forward contracts on September 9th.

Trading margins for gold forward contracts will be raised to 13 percent, while the daily circuit breaker will be lifted to 10 percent. Silver forward contracts will also see trading margins raised by one percentage point to 16 percent, while daily movement will be raised to 12 percent. This is the third such move for the Shanghai Gold Exchange since August.

Duan Shihua, gold researcher in Haitong Securities said, "The Shanghai Gold Exchange made the move because prices have fluctuated a lot. It's not only China's gold exchange raising margins, but also CME. The exchange wants to prevent excessive volatility and stabilize the market. "

Source:Li Wanran