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CFTC's Chilton wants position limits on gold, silver trading

Section: Daily Dispatches

By Edward Beeson
Compliance Reporter, New York
Wednesday, July 8, 2009

Bart Chilton, a member of the Commodity Futures Trading Commission, told Compliance Reporter today that he supports mandating position limits on all metals and believes the commission should explore whether limits should be introduced on financial instruments such as foreign exchange, eurodollars, and Treasury bills. He is aiming to make the ideas part of the debate about new rules on oil and gas trading.

The CFTC this week announced that it will hold public hearings this month and in August to consider position limits in oil and gas markets. Some observers have blamed what they say is excessive speculation for price fluctuations in those markets.

Chilton said he daily hears concerns about large positions being held in metals, particularly in silver and gold. Since last September, the CFTC's enforcement division has joined other federal and international regulators in an investigation into potential manipulation and concentration of positions in the silver market, he added.

Chilton said he is unsure whether his fellow commissioners would support position limits on metals, but is hopeful the idea will gain momentum during the hearings on oil and gas. "I'm hopeful that when we produce a rule" on oil and gas position limits "we have metals in there," he said.

While Chilton is not sure the markets need position limits on financial instruments, the idea should be explored. "Our job is to be looking at these things, to be nimble, to be quick. To look around the corner, to look at what we should be doing," he said.

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