China's Shanghai Gold Exchange (SGE) adjusted the margin rate and price limit for gold deferred contracts on Monday.

As of after-hours clearing on Monday, the margin rate for Au (T+D), mAu (T+D), Au (T+N1), Au (T+N2), NYAuTN06, and NYAuTN12 would be adjusted from 8 percent to 9 percent, and the price limit will be adjusted from 7 percent to 8 percent from the following trading day, the SGE said in a statement posted on its official website on Friday.

Senior gold analyst Li Yang explained that raising the margin rate can help control market risks. When the price of gold rises, market volatility tends to increase, leading investors to engage in more aggressive trading behavior. By raising the margin rate, the exchange can mitigate excessive trading and speculative activities that members and investors might face, thereby reducing the overall systemic risk of the market.

The SGE also reminded investors to be prudent in risk prevention, reasonably control positions and ensure market stability.