GFEX Caps Platinum & Palladium Futures After China’s Precious‑Metals Rally Sparks Market Stress
China’s Guangzhou Futures Exchange (GFEX) will impose limits on new daily openings and raise minimum opening sizes for select platinum and palladium futures (PT2606, PT2608, PT2610, PT2612 and PD2606, PD2608, PD2610, PD2612), effective December 29, 2025. The measures — a cap on daily new openings for non‑futures firms (300 lots) and an increase of minimum opening size from one lot to two — respond to extreme price volatility and persistent onshore premiums versus London and COMEX. Platinum rallied to about $2,377.50 before retreating to ~$2,220 (roughly +145% YTD) and palladium reached three‑year highs near $1,684 (~+85% YTD). The move follows chaotic silver trading in China (Shanghai silver briefly near $80/oz; global spot ~ $72/oz) and stress in China’s UBS SDIC Silver Futures Fund, which hit its 10% daily loss limit after earlier huge gains amid delivery shortages. For traders: expect elevated volatility around Dec 29, potential liquidity squeezes in onshore metals markets, wider Shanghai–COMEX spreads, and knock‑on effects for commodity‑linked derivatives and crypto products that track metals or use them as collateral. Monitor GFEX notices for exact position caps and settlement/delivery rules, watch onshore vs international price dislocations, and adjust short‑term risk management, leverage and position sizing accordingly.
Neutral
GFEX’s measures are primarily market‑stability steps that restrict speculative openings and increase minimum lot sizes. Short‑term impact: likely increased volatility and reduced liquidity in onshore platinum/palladium futures as traders adjust positions ahead of the Dec 29 rules, which can produce sharp price moves and wider Shanghai–COMEX spreads. This creates execution and funding risk for leveraged positions and commodity‑linked crypto products, pressuring short‑term sentiment. Medium‑to‑long‑term impact: the caps should dampen extreme speculative flows and reduce local price dislocations, which supports more orderly markets and could be stabilizing once enforced. Because the action is regulatory and aimed at limiting excess speculation rather than signaling fundamental demand shocks, the net directional effect on the metals themselves is ambiguous — temporary dislocations could push prices either way, but structural risk of runaway speculative rallies is reduced. For crypto traders: expect spillovers where metal‑pegged tokens or collateralized positions see higher margin calls and funding costs short‑term, but overall the measure leans toward restoring market order rather than permanently bullish or bearish price pressure.