More physical gold to serve as collateral: CME ( CME ) (by Myra P. Saefong)

SAN FRANCISCO (MarketWatch) -- CME Group (cme) said its customers will be able to post more physical gold as performance bond collateral, raising the amount to $500 million from $200 million as of the close of business on Monday. Performance bonds, or margin requirements, are money investors must put up to be able to trade futures contracts. Bullion customers had asked the CME to raise the amount, according to Harriet Hunnable, managing director of metals products at CME Group. "A number of our clearing firms hold gold in London and want to utilize more of it for collateral," she said. "The interest rate for gold is currently negative so this means that it is very cost efficient for a holder of gold to place it as collateral."