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CMC Provides Update On Why It Is Halting Gold And Silver Futures Products

Tyler Durden's picture




 

Yesterday we reported on the halt of gold and silver futures trading by Australian broker CMC Markets. As noted, CMC did indicate it would continue trading gold and silver spot products, which is why we were surprised by the difference in trading halt outcomes between the Australian firm and Forex.com which had halted XAU and XAG outright. To provide further clarification on the CMC decision, here is an email we received from Jane Bryant, PR campaign amanger at CMC Markets...

Hi Tyler,

I read your post 'Another broker halts trading gold and silver products' with interest, as obviously it is about CMC Markets in Australia. My concern is that your blog post does not communicate the real reason why CMC Markets has stopped trading gold and silver futures. http://www.zerohedge.com/article/another-broker-halts-trading-gold-and-silver-products

Put simply - we still offer spot gold and spot silver as they are more liquid, have a greater transactional flow and have more continuous pricing when compared to silver and gold futures. CMC has stopped trading silver and gold futures purely for commercial reasons (ie we have overwhelming client interest in gold and silver spot products), and is not connected in any way to Dodd-Frank's product prohibition.

So there you have it: people are just not interested in trading gold and silver futures. Which is probably not good if indeed gold and silver spot trading, where allegedly the bulk of the volume is concentrated, will soon be prohibited by Dodd-Frank.

We have sent an inquiry into CMC to ask if they will halt spot gold and silver trading in light of the Frankendodd developments. We will post it as soon as we get it.

 

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Mon, 06/20/2011 - 09:37 | 1384603 SheepDog-One
SheepDog-One's picture

'Gold and silver futures? Meh....we're just not interested in em'....gee I wonder why, since people will trade futures on any made-up instrument imaginable, but just not GOLD and SILVER.

Mon, 06/20/2011 - 09:39 | 1384613 bankrupt JPM bu...
bankrupt JPM buy silver's picture

I'll continue to buy the PHYZZ.  I'm 80% done with this paper game.

www.silvergoldsilver.blogspot.com

Mon, 06/20/2011 - 09:57 | 1384660 Libertarians fo...
Libertarians for Prosperity's picture

Buying 'em cheap, and stackin' them deep!

I'm probably about 82% done with this paper game. As soon as the Comex defaults next month (50/50 chance it will or it won't), the paper games might (again, 50/50 chance) end at some unspecified point in the future.  Next week or 200 years from now is your decision.

Personally, I think volatility will increase sometime in the future, which means that price might go up and price might go down on no news - it's just a feeling I've got in my gut.  Can't quite explain it, but anyone who's been trading silver for a long time knows what I mean.  

Let me be clear:  volatility will increase in the future, and it has, at some undefined point in the past, increased too.  And that makes me right no matter what anyone says.

This is a fantastic time to be buying physical.  So was every data point in the past.  And every data point in the future will be too.  

Stacking deep! Buying cheap! Ain't no guuubermint gonna take my metal.  

 

Mon, 06/20/2011 - 10:21 | 1384742 tmosley
tmosley's picture

RNR, you are such a fucking coward.

Better change names again, you worthless piece of shit.

Mon, 06/20/2011 - 10:27 | 1384746 trav7777
trav7777's picture

funny how you recognize the stink of your own shit even when not mentioned by name.

You are so pathetic and he had you pegged

Mon, 06/20/2011 - 11:05 | 1384858 Djirk
Djirk's picture

Are the ETFs next? Should I dump SLV (or just take some more profits)

Mon, 06/20/2011 - 11:53 | 1384992 Hugh G Rection
Hugh G Rection's picture

RNR and Trav, start breaking in your manginas now.  You're both going to have a foot long silver cock rammed balls deep up your Keynesian asses.

 

The Crimex WILL default, 6 months, a year, who knows? Now go masturbate to John Holdren pics, you eugenicist asshat.

Mon, 06/20/2011 - 12:45 | 1385125 tmosley
tmosley's picture

Not really.  He is an incredible hypocrite, in addition to being an aggressive little petite Hitler.  That is to say, even as he lambasted one and all for talking about silver, he himself fucking owns it.

Mon, 06/20/2011 - 12:47 | 1385132 tmosley
tmosley's picture

What, are you saying that you are so stupid that you can't recognize when others are using your words?

Better castrate yourself, eugenics boy.

Mon, 06/20/2011 - 09:56 | 1384663 Thomas
Thomas's picture

Dump the paper shit and let's just trade coins and ingots. Nobody should be this leveraged anyway. Blow them out and let's get on with trading the real stuff.

Mon, 06/20/2011 - 10:00 | 1384670 SWRichmond
SWRichmond's picture

This is what a deleveraging in the PM markets looks like.  The prohibition on OTC PM trading is also, of course, global capital control. 

= People are starting to realize that gold is money, and governments are starting to notice.  The game is afoot.

Time to cash out some more of my IRA.

Mon, 06/20/2011 - 10:24 | 1384735 kentfinance
kentfinance's picture

reinforces the thesis on buying the phys.

paper is irrelevant

could this be the start of the real price divergence?

Mon, 06/20/2011 - 10:21 | 1384740 kentfinance
kentfinance's picture

reinforces the thesis on buying the phys.

paper is irrelevant

could this be the start of the real price divergence?

Mon, 06/20/2011 - 09:38 | 1384607 SparkyvonBellagio
SparkyvonBellagio's picture

They should halt trading in the Dollar.

Mon, 06/20/2011 - 10:11 | 1384705 HoofHearted
HoofHearted's picture

No no no. Not yet. I've still got a couple of dollars to trade in.

Pissed me off when I had all those S&H green stamps saved up and then poof...the redemption was gone. History may not repeat, but it just might rhyme once again...

Mon, 06/20/2011 - 09:39 | 1384612 Ray1968
Ray1968's picture

If it isn't in your hand, you don't own it!

Mon, 06/20/2011 - 09:49 | 1384632 Cognitive Dissonance
Cognitive Dissonance's picture

I'm good for it. Trust me.

/sarc

Mon, 06/20/2011 - 10:56 | 1384838 Mr Kurtz
Mr Kurtz's picture

I like that. "Trust me". Yup, just ask any Indian.

Mon, 06/20/2011 - 09:51 | 1384641 66Sexy
66Sexy's picture

THIS. If you cant hide it from lawyers, the government, creditors, and your wife... you dont own it!

Mon, 06/20/2011 - 09:57 | 1384652 caconhma
caconhma's picture

Bravo, this is the quote of the month.

Mon, 06/20/2011 - 10:01 | 1384667 Thomas
Thomas's picture

I can do that.

Mon, 06/20/2011 - 10:13 | 1384709 nevadan
nevadan's picture

...and your wife...  lol, a coffee up the nose moment.  Wives are the ultimate risk.

Mon, 06/20/2011 - 11:07 | 1384848 Mr Kurtz
Mr Kurtz's picture

Apologies for the vulagarities but as my dear ole departed dad once advised me, " Sonny, if it flies,floats or fucks, then goddamn it, you rent it, you don't ever buy it!"

Mon, 06/20/2011 - 10:27 | 1384757 scatterbrains
scatterbrains's picture

lol amen brother! Be a man.. have a full sack

Mon, 06/20/2011 - 11:10 | 1384871 tarsubil
tarsubil's picture

Oh crap! My wife! I never thought of that!

Mon, 06/20/2011 - 11:16 | 1384874 Mr Kurtz
Mr Kurtz's picture

Mine never lets me forget <sigh> another story for another time.

Mon, 06/20/2011 - 11:12 | 1384875 Mr Kurtz
Mr Kurtz's picture

Mine never lets me forget <sigh> another story for another time.

Mon, 06/20/2011 - 09:55 | 1384657 Harlequin001
Harlequin001's picture

Ray1968, If it is in your hands your government owns it. You can call it yours for as long as they say you can. Then you hand it over...

Move it offshore where they can't take it...

Mon, 06/20/2011 - 13:00 | 1385171 CynicLaureate
CynicLaureate's picture

Yeah, move it offshore so a different government can take it...

There's a reason so many countries want rich people to move in; they've already taken everything they can from their own citizens.

Mon, 06/20/2011 - 13:31 | 1385265 Harlequin001
Harlequin001's picture

You haven't really thought this through, have you...

Mon, 06/20/2011 - 09:42 | 1384615 PaperBear
PaperBear's picture

Let the gold futures and silver future die the death they long deserve thanks to the rampant manipulation.

Mon, 06/20/2011 - 09:44 | 1384616 Lmo Mutton
Lmo Mutton's picture

I thought getting physical was buying futures.

Mon, 06/20/2011 - 09:56 | 1384662 Harlequin001
Harlequin001's picture

Yep, physical futures. Can't go wrong...

Mon, 06/20/2011 - 10:02 | 1384669 Thomas
Thomas's picture

I like the Panda futures, but occasionally by 100 ounce futures.

Mon, 06/20/2011 - 10:04 | 1384686 Harlequin001
Harlequin001's picture

In future if it doesn't break my foot when I drop it, I don't buy it...

Mon, 06/20/2011 - 09:44 | 1384617 ViewfromUnderth...
ViewfromUndertheBridge's picture

Guys, this is a synthetic trading platform...you trade the CMC "price" not the gold or silver price on Comex or Globex...CMC are the market-maker so they are saying they could not garner enough clients to trade their "look-alike" futures product to make it worth their while.

Mon, 06/20/2011 - 09:44 | 1384618 Lmo Mutton
Lmo Mutton's picture

I thought getting physical was buying futures.

Mon, 06/20/2011 - 09:50 | 1384621 ViewfromUnderth...
ViewfromUndertheBridge's picture

"We have sent an inquiry into CMC to ask if they will halt spot gold and silver trading in light of the Frankendodd developments"

OK, so PR might become the 51st state but I haven't heard Australia has dibbs on being No. 52 yet...

Yeah...let's see how polite this flack-lady truly is by asking more dumb-ass questions after we printed a completely bullshit story....

Mon, 06/20/2011 - 10:11 | 1384704 fredquimby
fredquimby's picture
@ViewfromUnderth...

+1 for previous comment

+1 for this comment.

 

 

 

Mon, 06/20/2011 - 11:09 | 1384859 Broomer
Broomer's picture

You are wrong, there is already a 51st state. It is called "Israel".

Mon, 06/20/2011 - 09:45 | 1384622 A_MacLaren
A_MacLaren's picture

Why own the digital "equivalent", when it isn't?

Mon, 06/20/2011 - 09:42 | 1384626 AUD
AUD's picture

XAU and XAG are some kind of index right? These CMC 'products' would still be CFD's, just  pricing off the index rather than the COMEX.

I don't see much difference.

Mon, 06/20/2011 - 09:47 | 1384628 breezer1
breezer1's picture

physical is the future.

Mon, 06/20/2011 - 09:48 | 1384629 Aborted Baby Seal
Aborted Baby Seal's picture

JP Morgan Strategy:

 

Wait until Frakendodd is in effect

Fail to deliver on futures contracts

Profit

Mon, 06/20/2011 - 09:48 | 1384630 Cognitive Dissonance
Cognitive Dissonance's picture

Mr. Gold just got it's 9:30 AM EDT woody. I bet Mrs. Gold is very happy.

Mon, 06/20/2011 - 11:24 | 1384890 Mr Kurtz
Mr Kurtz's picture

A short (hah) lived woody...gold is down a buck as of 11:20AM. Oh well, what goes up, goes down. Even Mrs. Gold needs to take a break every now and then.

Mon, 06/20/2011 - 11:28 | 1384912 Drachma
Drachma's picture

As usual, induced flaccidity followed quickly before insertion. Mr. Gold couldn't get the image of grandma creeping up his leg out of his mind.

Mon, 06/20/2011 - 09:47 | 1384636 apberusdisvet
apberusdisvet's picture

There is a growing epiphany that the vaults are empty at GLD and SLV and Comex and LBMA and Ft Knox, etc etc

Mon, 06/20/2011 - 09:55 | 1384659 NoRestForTheWicked
NoRestForTheWicked's picture

Are Comex and LBMA supposed to have vaults?  Certainly there's a great big dollop of counterparty risk there.  Ft Knox does have gold - James Bond made sure that Goldfinger couldn't set off the nukes to contaminate the stock.  Leave that to Fukushima.

Mon, 06/20/2011 - 11:07 | 1384863 Broomer
Broomer's picture

But this was in 1964, before Nixon closed the gold window because America no longer had any of it.

Mon, 06/20/2011 - 09:50 | 1384644 So Close
So Close's picture

Sorry for the otp...  Can one of you smart guys tell me why the spy etf is always a few basis points of the change in the s&p 500 reported % change?

Thanks in advance.

Mon, 06/20/2011 - 09:56 | 1384649 ViewfromUnderth...
ViewfromUndertheBridge's picture

No

Mon, 06/20/2011 - 10:03 | 1384673 Harlequin001
Harlequin001's picture

Good answer... brief and to the point. like it.

Mon, 06/20/2011 - 09:55 | 1384646 XenoFrog
XenoFrog's picture

Maybe they heard it only costs $5 to dig silver out of the ground and not worth the effort to trade.

Mon, 06/20/2011 - 11:09 | 1384870 JW n FL
JW n FL's picture

you can either get a Big Mac.. or.. you can try to eat that $5 Bucks in Silver.. the choice is yours people!

Mon, 06/20/2011 - 09:51 | 1384648 FranSix
FranSix's picture

Looks like backwardation in gold is the result:

http://finance.yahoo.com/q/fc?s=GCM11.CMX

Mon, 06/20/2011 - 10:08 | 1384688 gratefultraveller
gratefultraveller's picture

Steer clear of CMC, as their conditions of use cite clearly that the prices indicated by their platforms "might differ from the market price"... My experience is that the system will "hang" frequently when you are trying to exit a position profitable for you, that "orders" will be executed without your intervention (to get you out of profitable positions), that they will temporarily detach their price from the market price to trigger your stops etc. etc.

It is not by chance that the owner has become one of the richest men in London within a few years of the inception of CMC Markets.

Mon, 06/20/2011 - 10:18 | 1384724 ViewfromUnderth...
ViewfromUndertheBridge's picture

all true but....wait for it...the clincher:

10% owned by the vampire squid itself!

Mon, 06/20/2011 - 10:09 | 1384695 gratefultraveller
gratefultraveller's picture

Steer clear of CMC, as their conditions of use cite clearly that the prices indicated by their platforms "might differ from the market price"... My personal experience is that the system will "hang" frequently when you are trying to exit a position profitable for you, that "orders" will be executed without your intervention (to get you out of profitable positions), that they will temporarily detach their price from the market price to trigger your stops etc. etc.

It is not by chance that the owner has become one of the richest men in London within a few years of the inception of CMC Markets.

Mon, 06/20/2011 - 12:40 | 1385109 HungrySeagull
HungrySeagull's picture

You seems to have "Hanged" yourself trying to post to ZH.

Mon, 06/20/2011 - 10:06 | 1384698 earnulf
earnulf's picture

Physical Silver is preparation for what may happen (and yes, I'm pessimistic) but keep in mind that the market can stay irrational for longer than we can stay liquid.

If futures stop being available to everyone, then there will come a disconnect between physical and paper.   It might not happen at once, and when it does, it may be like an earthquake.   That would be a sharp, violent break followed by tremors that wreak havoc in the markets.

You don't hold it, you don't own it.

Mon, 06/20/2011 - 10:12 | 1384708 steve.stuart
steve.stuart's picture

This is bullish for Gold and Silver ....people want Gold and Silver now they do not care about future they know it is only going up and so want delivery. people are losing faith in the paper money.

Mon, 06/20/2011 - 10:22 | 1384731 MobBarley
MobBarley's picture

Well well well. This is all Unexpected /sarcasm.

An advisor to the Queen of England recently 'foresaw' gold at $10,000/oz

but first, the physical/paper disconnect, the revelations of hanky panky

with the tungsten store at Ft Knox, the confiscation by stealth via

government intervention in reputable gold traders with accusations of

misdoing, and finally , the 'Owning Gold is unpatriotic and terrorism'

campaign by Big Fat Banker Brother

 

Mon, 06/20/2011 - 10:36 | 1384767 plocequ1
plocequ1's picture

This just in from reliable sources... "The market is up"

Mon, 06/20/2011 - 10:38 | 1384771 baby_BLYTHE
baby_BLYTHE's picture

who is going to buy all the treasuries when Berspanke is done goosing the markets?

Mon, 06/20/2011 - 10:49 | 1384819 Cognitive Dissonance
Cognitive Dissonance's picture

Your defined benefit pension plan, 401(k) and IRA.

Say thank you Big Ben for guaranteeing that you will no longer suffer losses in your retirement accounts because you 'voluntarily' invested in government debt. Until the house of cards falls down that is. But by that point............

Mon, 06/20/2011 - 10:57 | 1384844 FranSix
FranSix's picture

"Mike (MishShedlock published a rejoinder to my There Is No Fever Like Gold Fever (see References below). According to him I have stated that "gold is not for sale at any price", here and now. What I have said was that if Comex declared "liquidation only", in effect closing the gold window, and backwardation became a permanent fixture of gold futures trading, then it would be tantamount to "gold is not for sale at any price". Mish also puts words into my mouth suggesting that I considered this an equivalent of the gold price shooting up to infinity, a kind of initial salvo to mark the beginning of hyperinflation in theUnited States."

http://www.24hgold.com/english/contributor.aspx?contributor=Antal%20E.%2...

http://www.safehaven.com/author/8/antal-e-fekete

Mon, 06/20/2011 - 11:17 | 1384877 Bay of Pigs
Bay of Pigs's picture

@ FranSix,

I understand your point, but don't expect Mish to answer anything on gold or silver. He's never bothered to research the topics and therefore, knows very little about them. 

He bad mouths GATA, Jim Sinclair and ZH. Enough said.

Mon, 06/20/2011 - 12:57 | 1385162 FranSix
FranSix's picture

Fekete may very well be right about the structure of gold backwardation without gold prices having to go to infinite levels.  The latest wrinkle about futures contracts may mean that gold was just 'monetized.'

Mon, 06/20/2011 - 11:02 | 1384845 eblair
eblair's picture

Is this just CMC in Australia or in Europe also?

Mon, 06/20/2011 - 11:24 | 1384902 FunkyOldGeezer
FunkyOldGeezer's picture

Steer clear of CMC, as their conditions of use cite clearly that the prices indicated by their platforms "might differ from the market price"... My experience is that the system will "hang" frequently when you are trying to exit a position profitable for you, that "orders" will be executed without your intervention (to get you out of profitable positions), that they will temporarily detach their price from the market price to trigger your stops etc. etc.

It is not by chance that the owner has become one of the richest men in London within a few years of the inception of CMC Markets.

Be careful what you write as this is potentially libelous. The owner of CMC Markets has, in the recent past, appeared on a certain trading forum and publicly repudiated most (if not all)of what you've written. Their platform has no broker intervention whatsoever and their Gold and Silver prices seem pretty kosher to me, so far as anyone can tell. Silver certainly dropped $6 plus in twelve minutes just a few weeks ago, just like it did everywhere else.

I have no affiliation to CMC and certainly have cause to not have them on my Christmas card list, but...

Mon, 06/20/2011 - 17:21 | 1386453 gratefultraveller
gratefultraveller's picture

Thanks for your advice, but every one of my claims is backed up by plenty of screen shots I (and a friend of mine) still have on hard disk. If you look around a bit there are also plenty of posts in various forums that go down my line, in several languages.

Mon, 06/20/2011 - 13:10 | 1385203 GeneH3
GeneH3's picture

Libel is a serious matter in the UK.  Unlike the US, unfettered speech against public figures is not protected.  And in lawsuits the loser pays the other side's attorneys fees. Be circumspect.

Mon, 06/20/2011 - 13:20 | 1385231 terranstyler
terranstyler's picture

Tyler, I traded with CMC Markets and they asked for a 5$ commission per CFD on 100 oz silver. On the other hand, if you traded XAG you could choose the exact number of ounces you wanted and (i.e. 25 oz) and you paid like 5 ct  per night and 100 oz. Plus you didnt have to care about expiry.

So for smaller traders or ppl with a smaller time horizon XAGUSD was way better than their cfds on futures which should be the reason why they stopped it.  Dunno in XAUUSD but it's pretty probable that it's them same...

Mon, 06/20/2011 - 13:18 | 1385234 terranstyler
terranstyler's picture

double post

Mon, 06/20/2011 - 13:23 | 1385237 terranstyler
terranstyler's picture

triple post, sry it was soooo laggy^^

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