Re: "let's get physical"

CME To Allow Gold As Margin Requirement Collateral
Submitted by Tyler Durden on 10/19/2009 08:41 -0500

Is JPMorgan in urgent need of gold replenishment? If one reads between the lines of today’s surprising announcement out of the CME, that the Chicago exchange will allow the use of gold as collateral for margin requirements (for up to $200 million), with the actual physical gold to be stored at JPM’s bank in London, that is one possible explanation. From a Nasdaq press release:

U.S.-based clearing house CME Group Inc. (CME) will allow physical gold to be used as collateral for margin requirements on all exchange products, a spokesman said Monday.

The new global policy is effective Oct. 19 in accordance with a member’s notice issued late Friday, said spokesman Jeremy Hughes in London.

Clearing member firms will be allowed to post up to a maximum of $200 million worth of gold as collateral to cover performance bond, or margin, requirements, Hughes said.

The gold will be held at J.P. Morgan Chase & Co.’s (JPM) bank in London.

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