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CFTC to examine trading in metals markets
By Tom Doggett
Tuesday, February 23, 2010
WASHINGTON -- The U.S. Commodity Futures Trading Commission said on Tuesday it will hold a public meeting on March 25 to examine whether position limits are needed for gold, silver, and copper futures markets.
The CFTC, the top regulator for futures markets, has long enforced position limits for grains trading, and is now mulling similar restrictions on the number of contracts speculators can hold for other markets.
The March 25 meeting will look at "the application of speculative position limits to address the burdens of excessive speculation in the precious and base metals markets; how such limits should be structured; how such limits should be set; the aggregation of positions across different markets; and the types of exemptions, if any, that should be permitted," the CFTC said in its official notice.
The meeting will hear from experts from all segments of the markets, the CFTC said. The names will be announced later. The CFTC will also accept public comments until April 30.
Currently, the CFTC is considering public comments on position limits to prevent concentration in energy markets.
Those limits were proposed last month, after some blamed speculators for soaring commodity and energy prices in 2008.
CFTC Chairman Gary Gensler has said he believes position limits should be applied consistently to all markets overseen by the agency.
CFTC Commissioner Bart Chilton had pushed for metals to be included in the rule-making process for energy contracts, but he said last month that CFTC lawyers had decided the agency would need to treat the two matters separately.
"It is my sincere hope and expectation that the upcoming hearing on position limits with regard to metals will enable us to move more expeditiously on a parallel regulatory process for metals," Chilton said at the energy hearing on Jan. 14.
The three other commissioners who comprise the CFTC have expressed concerns that position limits could drive trading to unregulated over-the-counter and overseas markets unless the U.S. Congress broadens the CFTC's authority.
Metals traders have said it would be difficult for the CFTC to clamp down on speculation in precious metals because most trading takes place outside the United States, especially in physical markets.
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