CME Group switched to a new margin calculation system for precious metals futures today (Tuesday), moving away from fixed dollar amounts to percentage-based requirements after gold and silver hit record highs this week.
The exchange now sets margins for gold, silver, platinum and palladium contracts as a percentage of notional value rather than specific dollar figures. The adjustment went into effect after Tuesday's close following what CME described as a routine volatility review.
Dollar Amount System Couldn't Keep Pace with Gold and Silver Surge
The old system required frequent manual adjustments as precious metals rallied and price swings intensified. Gold surged to $4,568 on January 12, entering what analysts call price discovery phase with no clear resistance levels ahead. Silver gained about 20% in just the first two weeks of 2026, pushing CME to raise margins multiple times last year as speculative trading picked up.
CME's notice to clearing members noted that the exchange "currently sets 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."
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Under the percentage method, gold futures now require 5% maintenance margin for standard accounts and 5.5% for higher-risk positions. Silver margins stand at 9% and 9.9% respectively. Platinum margins are set at 9% and 9.9%, while palladium requires 11% and 12.1%.
The percentage approach automatically scales margin requirements up or down with price movements. CME made at least three margin adjustments in the fourth quarter of 2025 alone using the old dollar-based system. The exchange has been expanding its metals offerings while also growing its footprint in emerging markets.
Short-Term Pressure Expected
Christopher Wong, a strategist at Oversea-Chinese Banking Corp., said to Bloomberg the changes "may temporarily weigh on precious metals" as traders adjust to higher collateral requirements at current price levels.
The percentage-based method should reduce the need for frequent adjustments going forward, though CME could still raise the percentage itself if volatility exceeds historical norms or unexpected events occur.
Clearinghouses like CME require brokers to post cash margins daily to cover potential losses on client positions. These deposits help ensure clearing members can meet their obligations to customers and the clearinghouse itself. The system becomes particularly important during volatile periods when daily price swings can exceed 5% or more.
CME opened a Dubai office last year as Middle East trading volumes climbed, adding another regional hub to its global network. The exchange has been dealing with elevated metals trading activity across multiple time zones as both institutional and retail participants chase the rally.
Fed Crisis Fuels Haven Demand
Multiple factors are driving the precious metals surge beyond typical seasonal patterns. Concerns about Federal Reserve independence emerged after reports of a criminal investigation into Fed Chair Jerome Powell.
Dollar weakness and expectations for additional interest rate cuts have also supported prices. Silver faces additional speculation about potential US import tariffs, adding another layer of volatility to an already turbulent market.
The percentage-based margin system mirrors approaches used for other volatile asset classes where fixed dollar amounts quickly become outdated during trending markets. CME processes millions of precious metals contracts monthly across its various gold, silver, platinum and palladium products.
