Just when you think that PMs are off to the moon, the market gives you a gift!

MMR

CME Raises Gold Futures Margins By 6%, Hikes Silver Margins For Second Time In Under A Week

"If at first you don't succeed at killing the higher beta stock short hedge, try again. The CME has just raised its margin requirement on silver again, bringing maintenance margins up from $6,500 to $7,250, after hiking it less than a week ago for the first time and preventing silver from surpassing $30. Of course, why the CME is raising it more after the spot price of silver is now far lower than where it was at the first raise is a good question, but is most certainly due to the exchange's "risk mitigation" concerns, and has nothing to do at all with the intent to continue killing PM prices. Far more importantly, the CME has finally relented and also raised gold margins, as we had expected. The new maintenance margin is up from $4,251 to $4,500, a minimal increase just to allow the CME to have the option (and making speculators well aware of this) of hiking rates again at any point it so chooses. All in all, all is now fair in fighting excess record liquidity. Look for a second round of imminent margin hikes in cotton, sugar, coffee and wheat, as the exchanges are suddenly very concerned about what retail margin collapses may mean for the non-existent wealth effect."

Read the rest of the article here: Link

laxmaster92

So what does this mean for prices, both physical and paper?

MMR

I think it means that paper prices are headed down for the near future, but physical may become scarce unless longs panic and head for the exits. It is a desperation move by the CME IMHO.

As Roadrunner stated, this is WAR.

Joflax

If this is true then I retract my statement in a previous thread that there is nothing sinister about their decision by the CME. This would be outright manipulation !

phantom1701

Yeah, it's pretty clear they have concerns that they can't cover the contracts. I don't think they are trying to "kill" the price per se, but they certainly don't want anyone pulling anything near a Hunt Brothers type of a move right now. So they will keep raising the fees to discourage new contracts until they can catch their breath. And maybe even allow holding companies to cover their positions with the lowered pricing that comes with this type of move by the CME.

roadrunner

Did JPM and HSBC give the CME and offer they couldn't refuse?

roadrunner

piecesofme

wow!, i'm speechless.

meluaufeet

One just has to wonder which banks are part of the consortium for the CME... also... I thought the Brazilians held the largest piece of CME stock.

I'm thinking 25 flat was the short term bottom for silver... not so confident about gold... yet.

I also think its interesting that the 'Crash JPM - Buy Physical Silver' just went viral... its almost a gift. Buying felt good...

percyb

<< <i>One just has to wonder which banks are part of the consortium for the CME... also... I thought the Brazilians held the largest piece of CME stock.

I'm thinking 25 flat was the short term bottom for silver... not so confident about gold... yet.

I also think its interesting that the 'Crash JPM - Buy Physical Silver' just went viral... its almost a gift. Buying felt good... >>



I'm with you. Nibbled today. Felt safer here than over 27, that's for sure.

halfhunter

In January 1980 margin on an un-hedged silver contract was $75,000. Hedged contracts were $20,000/contract ! ! !

HH

jmski52

It's almost a mild form of price controls, when you think about it. If there is pressure building, it won't go in just one direction. It's going to be volatile and there's nothing to be done about that, except to be watchful and do what you intend to do in the markets. If you can time the moves, you've got me beat every time.

MMR

Is the gift giving season coming to an end? I didn't finish all of my Christmas shopping yet!

China Business Daily Reports China Is Considering Raising Gold Reserves

"The country which has languished in 6th position in the world, with combined gold holdings of 1,054 tonnes (just behind the GLD ETF), may have finally awoken that it needs to buy about 7,000 tonnes of gold to catch up with the US, and its 8,133 tonnes (or even France with 2,435). China daily 21st Century Business Herald has just reported that: "China is considering raising its gold reserves, a move which would push up gold prices in the future, a person providing consulting services to the Chinese government said." Conveniently, China can now buy gold notably cheaper courtesy of a $100 dip in gold price as recorded over the past week, precipitated by... China inflation concerns. When next month the politburo reports below consensus inflation (as the number is imaginary to begin with), look for gold to surge, but not before China manages to load up at depressed prices."

Read the rest of the article here:
Link

OPA

<< <i>but not before China manages to load up at depressed prices." >>



Depressed prices of $1300+? ..... I don't consider them depressed.