Gold price traded lowerafter the Shanghai Gold Exchange hiked margins to 12%

The gold price traded lower on Tuesday, sinking $14.50 to $1,883 per ounce, after the Shanghai Gold Exchange hiked margins to 12%. Gold price turned lower following the news out of China after hitting a new all-time high of $1,913 overnight.

On Monday, the gold price passed $1,900 per ounce for the first time on its way to yet another series of new record highs. COMEX gold futures, per the December contract, reached a new high of $1,917.90 per ounce Monday evening. The spot price of gold climbed to fresh all-time highs on the back of speculation that Fed Chairman Bernanke was contemplating a third round of quantitative easing (QE3).

The recent deterioration in economic data and worries over a double-dip recession has led investors to increase their allocations to gold and investments tied to the gold price. The SPDR Gold Trust (GLD) – a proxy for the price of gold and the largest gold exchange-traded fund (ETF) – eclipsed the SPDR S&P 500 ETF (SPY) to become the world’s largest ETF, based on net assets.

Strength in the gold price has sparked a broad-based rally in precious metals with silver climbing 1.9% yesterday. However, silver price moved lower Tuesday morning, declining $0.77 to $42.98 per ounce. Despite today’s weakness, gold’s sister precious metal remains perched near 3-month highs. Platinum, whose nominal price was surpassed by gold last week for the first time since 2008, retook the lead from the yellow metal by advancing $28.50, or 1.3%, to a three-year high of $1,903.40 per ounce.