Rumors are circulating this week that an article in the Dodd-Frank Act will bar US traders from participating in over-the-counter precious metals trading beginning 15 July 2011. The story began when Forex.com announced to its customers that its precious metals operations would be closing shortly due to regulatory pressure.
The regulation apparently will not affect the trading practices of other countries; it will merely limit the influence the US investment establishment has over the volatile pricing of precious metals like gold, silver, and platinum.
Several lawyers and economists claim that the law in question, Section 742(a) of the Dodd-Frank Act, however, does not in fact prohibit commodity trading in such a way. It merely limits who can participate in the commodity markets. Many analysts are claiming that Forex.com’s maneuver is an overreaction to regulatory pressures and not representative of the international forex brokerage environment.
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