By Ishaan Arora Feb 2 (Reuters) — Gold extended its fall on Monday as increases in CME precious‑metals margin requirements set to take effect at session close weighed on prices; spot gold was down 3.3% at $4,703.27 per ounce as of 0259 GMT, after falling more than 5% earlier in the session and trading near two‑week lows.

  • Price: $4,703.27 per ounce (spot), down 3.3% as of 0259 GMT
  • Move: fell more than 5% earlier in the session; trading near two‑week lows
  • Driver: CME precious‑metals margin requirement increases effective at session close
  • Macro: Markets are also assessing U.S. President Donald Trump’s Fed‑chair pick, Kevin Warsh, and implications for rate‑cut expectations
  • Date/Source: Feb 2 — Reuters (Ishaan Arora)

Context: where this sits in the market cycle

The immediate pressure on gold reflects two linked dynamics: a liquidity‑management move by the CME that raises the cost of carrying futures positions, and shifting expectations around U.S. monetary policy. Higher margin requirements reduce leverage for speculators and commercial traders in CME precious‑metals contracts, accelerating short‑term price discovery and amplifying selling when positions are reduced ahead of a session close.

At the same time, commentary around Kevin Warsh as a prospective Fed chair feeds into the rate‑cut narrative. Expectations for slower or delayed easing typically support higher real yields, which in turn can depress bullion demand. For traders and market makers, that combination tightens risk tolerances and increases the potential for intraday moves.

Impact: why U.S. retailers, wholesalers and investors should care

For U.S. jewellery retailers and wholesalers the immediate outcome is operational: more volatile spot prices complicate timing for purchases and hedging. Firms that use futures to hedge inventory will face larger initial capital requirements and a higher chance of margin calls; those without hedges confront inventory valuation swings that can compress gross margins.

Buying desks and wholesale partners should reassess near‑term procurement windows and liquidity buffers. Online and brick‑and‑mortar sellers that price merchandise in fixed dollars per piece may need to tighten merchandising cadence or layer forward contracts more conservatively to avoid marking down stock acquired during brief price dislocations.

For investors, the move underscores how market‑structure actions—margin settings at exchanges—can be as influential as macro commentary. In periods when margin policy tightens, expect heightened intraday volatility and faster price adjustments, which changes execution risk and the cost of holding bullion exposure.

Reporting: Reuters (Ishaan Arora). This desk has summarized the market‑moving points relevant to jewellery trade and precious‑metals procurement.

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