CME taking gold as trade collateral

Crain's Chicago Business reports:

CME Group Inc., the world's top derivatives exchange operator, began accepting physical gold as collateral for all trading products, marking the first time an exchange has allowed gold bullion to be used for margin requirements.

CME's latest move underscored the rising popularity of gold as an investment asset class.

The new policy represents a more efficient way for clearing member firms to utilize their own gold bullion, said CME Group spokesman Jeremy Hughes.

"It is cheaper for them to fund their collateral via gold that they already hold than trying to finance other forms of collateral," Hughes said.

A big story.