SHANGHAI(BullionStreet): China's leading gold exchange, The Shanghai Gold Exchange said it will again raise margins and daily price moving limits for its gold contracts.

China's largest exchange for precious metals attributed this decision on the increased volatility in the precious metal sector.

The exchange will raise margins on gold contracts, including the gold spot deferred contract, to 13 percent from 12 percent from the settlement of Dec. 28.

Limit for daily price movement will rise to 10 percent from 9 percent from Dec. 31, the exchange said in a statement on its website.

The margin on its silver contract will remain unchanged at 17 percent, but trading limit will be raised to 13 percent from 12 percent, the SGE said.

The margins on gold will return to 12 percent, and on silver be lowered to 15 percent, at the settlement of the first trading day after the holiday if prices do not close at trading limits.

Analysts said this move will probably cause investors to sell, since they will have to deposit more funds in order to meet the new margin requirements.

 These limits will be cut to normal levels on the subsequent trading session.

The Shanghai Gold Exchange will be closed from Jan. 1 to Jan. 3 for the New Year's Day holiday. Other commodity exchanges have also announced temporary changes in margins ahead of the holiday.