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CME Raises Margin on Gold.....

MilesWaitsMilesWaits Posts: 5,349 ✭✭✭✭✭
in Precious Metals
Quote:



LOS ANGELES (Market Watch) -- U.S. exchange operator CME Group /quotes/zigman/107063/quotes/nls/cme CME +0.82% said late Wednesday it is raising the margin requirements for trade in a wide range of gold products, effective Thursday. The speculative margin requirement for a new position in Comex 100 gold futures will rise to $7,425 from $6,075, or to $5,500 from $4,500 for existing "current maintenance" margins. However, benchmark gold futures extended their rise in the wake of the announcement. Comex gold for December delivery /quotes/zigman/661658 GC1Z +1.08% rose to $1,807 an ounce from its $1,784 New York settlement level Wednesday, ahead of the CME announcement.
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Comments

  • BigRickBigRick Posts: 1,334
    We'll see if the bubble pops.
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  • fivecentsfivecents Posts: 11,207 ✭✭✭✭✭


    << <i>CME Raises Margin on Gold..... >>

    Rut roh.image
  • SpoolySpooly Posts: 2,108 ✭✭✭
    Read-em like a book......
    Si vis pacem, para bellum

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  • mrearlygoldmrearlygold Posts: 17,858 ✭✭✭
    $1806.30

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  • vannvann Posts: 318


    << <i>We'll see if the bubble pops. >>


    Gold is a much larger market and less leveraged than silver market so a margin hike that is around 20% is not likely to cause a significant impact on the spot price of gold. Back in April, the CME raised the silver margin requirements 87% in two weeks, spread over four separate changes that caused the COMEX 5,000-ounce silver futures contract (worth $195,000 at $39/oz) margin requirements go from $11,745 to $21,600. and caused the spot price to drop to $32 as leveraged investors were flushed out.
  • pmcollectourpmcollectour Posts: 1,211 ✭
    CME bought the CBOT (Chicago Board of Trade) for 200 per share years ago. CME's share price is now 270.
  • JustacommemanJustacommeman Posts: 22,847 ✭✭✭✭✭
    I've said this before but I'll repeat it---- Everytimr they raise the margin requirements that particular vehicle seems go eventually higher. MJ
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  • roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭
    I was talking to a friend today who was trying to get into gold. It was suggested that margin hikes were just around the corner. Little did I know how soon...guess $1800 was more
    than the CME could take. Will they jack it 3X in a week? Because you know one hike isn't even going to make a dent.

    Margin hikes will eventually overwhelm the longs on the Comex since their pockets are not unlimited. However the Bankster boyz can pile on the shorts until kingdom come because
    they are doing God's work and the Treasury/Fed/PPT will backstop them. At some point in time though price discovery on the Comex could become a worthless number.

    roadrunner
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • cohodkcohodk Posts: 19,102 ✭✭✭✭✭


    << <i>I've said this before but I'll repeat it---- Everytimr they raise the margin requirements that particular vehicle seems go eventually higher. MJ >>



    Agreed. Look what just happened to Treasuries after the margin increase jsut a few weeks ago.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭
    They also boosted margins on Treasuries and Forex as well. Jesse mentions this is like machine gunning the lifeboats. They really want everyone back into stocks.
    Yen and Swiss Franc were 2 of nearly 20 currencies bumped.

    It should be noted that with gold's peak today it finally hit the 25% point above the 200 dma. The 3 previous blow off peaks of 2006, 2008, and 2009 reached betw 25-40%.
    The 2009 peak was the weakest at 25% and was a slow grinder for the final few months. This current move is much more like spring 2006 and 2009 where things escalated
    quickly. Those peaked at 40 and 33% respectively. We're now in the final zone, target basically achieved. Now just fine tuning it. The intermediate peaks of last Nov, Dec,
    March, and May only reached to 11-17%. Those were clues that gold was just churning. It would appear that this one has enough steam to hit the 30% mark ($1890).
    The 30-40% range brackets $1890-$2037, using the current 200 dma of $1455 which will continue to rise.

    Next 2 angels up are $1849 and $1936. But like every 30% mark, a pretty hefty correction has followed. Bottoms have been spaced out fairly even about twice per year.
    But maybe that game is now broken along with the debt-money system as gold has entered an entirely new channel.

    Dollar adjusted gold chart

    The $1793 "A" target was overrun after the close.

    Saw an interesting Xiphos chart today using the 30 yr - 3rd tier cup with gold on a log chart (neckline at $730). That cup targets $2075. The 2 lower order cups already played out.
    For coffee drinkers.......now there are no more cups. image

    roadrunner
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • derrybderryb Posts: 36,793 ✭✭✭✭✭
    Margin is nothing more than buying on credit. Uncontrolled credit creates bubbles (look what it did to housing). Credit buyers are generally speculators. Speculators helps create bubbles. I have no problem with reducing the number of credit backed buyers in the gold or silver markets by raising margin requirements. I'd prefer that all metals transactions be paid in full and that margins were eliminated. Then you'd see true price discovery. When you see prices fall because of higher margin requirements be thankful that it is because speculation (bubble food) has been reduced. Those of us that are serious PM investors should welcome removal of speculation; while it might keep the prices realistic instead of inflated, it does in the long run protect our investment from a bubble "pop."

    "Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey

  • storm888storm888 Posts: 11,701 ✭✭✭


    $2K+ likely by September 1.









    Folks Who Bite Get Bitten. Folks Who Don't Bite Get Eaten.
  • MsMorrisineMsMorrisine Posts: 33,019 ✭✭✭✭✭


    << <i>

    << <i>I've said this before but I'll repeat it---- Everytimr they raise the margin requirements that particular vehicle seems go eventually higher. MJ >>



    Agreed. Look what just happened to Treasuries after the margin increase jsut a few weeks ago. >>




    they also upped it for treasury bond futures too.

    silver is not on the list. Uranium futures have a decreased margin requirement now! Pile In!

    list from CME
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  • PinkFloydPinkFloyd Posts: 1,762 ✭


    << <i>Margin is nothing more than buying on credit. Uncontrolled credit creates bubbles (look what it did to housing). Credit buyers are generally speculators. Speculators helps create bubbles. I have no problem with reducing the number of credit backed buyers in the gold or silver markets by raising margin requirements. I'd prefer that all metals transactions be paid in full and that margins were eliminated. Then you'd see true price discovery. When you see prices fall because of higher margin requirements be thankful that it is because speculation (bubble food) has been reduced. Those of us that are serious PM investors should welcome removal of speculation; while it might keep the prices realistic instead of inflated, it does in the long run protect our investment from a bubble "pop." >>



    Great post, 100% agree...
    Successful transactions with keepdachange, tizofthe, adriana, wondercoin
  • ksammutksammut Posts: 1,074 ✭✭✭
    << Margin is nothing more than buying on credit. Uncontrolled credit creates bubbles (look what it did to housing). Credit buyers are generally speculators. Speculators helps create bubbles. I have no problem with reducing the number of credit backed buyers in the gold or silver markets by raising margin requirements. I'd prefer that all metals transactions be paid in full and that margins were eliminated. Then you'd see true price discovery. When you see prices fall because of higher margin requirements be thankful that it is because speculation (bubble food) has been reduced. Those of us that are serious PM investors should welcome removal of speculation; while it might keep the prices realistic instead of inflated, it does in the long run protect our investment from a bubble "pop." >>

    I also agree with you.

    Deep pocket investors, PM funds, and foreign governments are probably behind much of gold's rise over the past week or so and they are not buying on credit. If QE3 gets announced soon and I think it will, $2000 gold and higher will be here before we know it and silver will go along for the ride.
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  • jmski52jmski52 Posts: 22,822 ✭✭✭✭✭
    Are you telling me that the leverage on a 100 oz. Gold Futures contract is = $176,500/$7,425 = 23.77 to 1?

    That hardly seems conservative, or prudent.
    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • ProofCollectionProofCollection Posts: 6,115 ✭✭✭✭✭


    << <i>I was talking to a friend today who was trying to get into gold. It was suggested that margin hikes were just around the corner. Little did I know how soon...guess $1800 was more
    than the CME could take. Will they jack it 3X in a week? Because you know one hike isn't even going to make a dent.

    Margin hikes will eventually overwhelm the longs on the Comex since their pockets are not unlimited. However the Bankster boyz can pile on the shorts until kingdom come because
    they are doing God's work and the Treasury/Fed/PPT will backstop them. At some point in time though price discovery on the Comex could become a worthless number. >>


    Again, the hike was needed just to keep the leverage ratios in check. Gold is up ~25% since July 1 (don't recall when the last hike was), so a margin hike of ~24% is prudent and to be expected. These hikes aren't on the scale of what happened in silver because silver DOUBLED in a really short period of time. Gold, "only" up 25% (28% since begninning of year).

    Gold is down about $45 at the moment, I think that will be the extent of the effect.
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