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Industry groups fought the original rule, adopted by a divided CFTC more than two years ago. They maintain that trading limits can make prices more volatile by reducing the amount of money flowing in the markets. A federal judge ruled in the opponents' favor in September 2012. The agency appealed the decision but recently withdrew its appeal to focus on drafting a new rule. Investor advocates had complained that the original rule was filled with excessive exemptions allowing banks and hedge funds to continue speculative trading. Increases in wholesale prices of commodities can get passed on to consumers in the form of higher gas prices, costlier airline tickets and more expensive food. Some experts say speculators aren't entirely to blame for price increases in commodities. They point to other factors, such as weather, supply disruptions and demand. Agricultural commodities such as corn and wheat have been subject for years to caps on speculative futures trading imposed by exchanges. Yet their prices have risen, experts say. The proposed limits on trading for 28 commodities mark the first time the federal government has imposed broad curbs.
[Associated
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