UPDATE 3-CME mulls price fluctuation limits for gold, silver futures

martes 29 de abril de 2014 18:51 GYT

(Recasts; adds trader comment)

By Frank Tang

NEW YORK, April 29 (Reuters) - U.S. futures exchange CME Group Inc is considering the introduction of daily limits on price moves in gold and silver futures in a bid to rein in wild volatility that has spooked investors in recent years, a CME official said on Tuesday.

CME at present has price fluctuation limits for futures contracts in some energy, agricultural commodities and financial products, but none for its precious and base metals products.

The possible move reflects growing concern at the largest U.S. exchange of futures and options about big bouts of buying or selling that have caused huge fluctuations in prices without any apparent fundamental reason.

"We don't have price limits in gold and silver. That's something that we are looking into," Miguel Vias, CME Group's director of metal products, said in a panel discussion at an industry event, in response to a question about how the exchange protects investors from excessive volatility.

U.S. exchange operators are already edgy about allegations over high-speed traders rigging the Wall Street stock markets and the so-called dark pools, or trading outside of exchanges, in the wake of the recently published book "Flash Boys: A Wall Street Revolt," by Michael Lewis.

The biggest concern for the exchange is the array of sophisticated trading programs that are capable of significantly pushing the market higher or lower, Vias said.

Unusually big moves and the fears of price "slippage" - the difference between the price at which a market player wants to execute an order and the price at which they are able to do so - have turned some gold and silver futures investors away, he said.   Continuación...