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Old 04-15-2013, 06:14 PM   #1
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Doodoo CME hike margins 18.5%

Just like May 2011, it's on like Donkey Kong:
Quote :
Anyone surprised, please raise your hands. And yes, it was fun when margin were hiked only on surges in the various futures contracts. Now, dumps works just as well. The logic, of course, is that gold shorts are also margined. However, judging by the immediate $15 drop in gold upon the announcement, those who are short the metals certainly have a much, much bigger balance sheet and cash hoard to satisfy any collateral requirements than those long. Next: expect the Shanghai Gold Exchange to hike margins in a few short hours once China wakes up and looks at overnight PM prices in horror.
...
http://www.zerohedge.com/news/2013-0...er-margins-185
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Old 04-15-2013, 06:24 PM   #2
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The higher the margins go, the closer we get to a cash market (ie. no leverage).
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Old 04-15-2013, 07:24 PM   #3
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All this does is guarantee that we won't see PMs above the recent support levels for months and months. Just the margin requirements will stop some of the speculation.
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Old 04-16-2013, 04:11 AM   #4
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This is not bearish for the metals imho. The margin hikes in April (not: May) 2011 were done to break the uptrend in silver at the very end of the spike to $49. They happened before the massive crash.
This time arround, weak longs have been completely flushed out of the market. If there had been more of them, the initial reaction to the hike would have been much more drastical. The margin hike occurred at the bottom and not at the top like in 2011. Now we only have weak shorts left and quite a lot of them. They'll have to cover at a lower price due to the margin hike.
Yes, speculators won't enter the market as rapidly, too. But that's not a bad thing. It means less volatility.
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Old 04-16-2013, 06:15 AM   #5
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One small nitpick - the April/May 2011 hikes (started in April, finished in May) happened *during* the massive crash. They were issued in a series of "mini" hikes that cast a chilling effect on the market.

http://www.zerohedge.com/article/cme...r-margin-hikes

http://www.zerohedge.com/article/and...nce-margins-12

http://tfmetalsreport.blogspot.com/2...five-days.html
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Old 04-16-2013, 06:22 AM   #6
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before and during
Still, as I said above, the weak longs are already flushed out this time, so the effect to the downside should be limited.
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Old 04-16-2013, 02:39 PM   #7
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I guess we have seen the delayed effect of the margin hike since 2pm ET.
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Old 04-17-2013, 05:21 AM   #8
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If you ever wanted a more obvious sign who is for rising gold/silver prices and who is against them, look at this:

On the one hand, The CME group which runs the COMEX, raised margins after the pm crash:
http://www.zerohedge.com/news/2013-0...er-margins-185

An the other hand, the Shanghai Gold Exchange just lowered margins:
Quote :
Shanghai gold exchange lowers margin requirements and price limits

- Gold contract margin requirement is set at 10%, daily price limit is at 7%.
- Silver contract margin requirement is set at 13%, daily price limit is at 9%.
http://ransquawk.com/headlines/shang...its-17-04-2013

Where would you as a speculator or hedger take your positions?

EDIT: Meanwhile in Asia:
Market talk of South East Asian names on the bid in gold at USD 1370 - Unconfirmed
Market talk’ – Signifies information that has not been formally tested through traditional journalistic channels and therefore is to be treated as unsubstantiated. Any interpretation of the talk is taken at the readers own risk and is a representation of the rumours within the market place and never generated by ourselves.
http://ransquawk.com/headlines/286970

Last edited by swissaustrian; 04-17-2013 at 05:26 AM.
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