CME Increases Gold, Silver, Palladium Margins

Tyler Durden's picture

The CME group announced that margins for metals futures contracts on the NYMEX and COMEX will rise beginning February 12 by approximately 25% across various classes.  The initial margin for 100-ounce COMEX gold futures will increase to $6,747 from $5,403, while the maintenance margin will rise to $4,998 from $4,002. For 5000-ounce COMEX silver futures, initial margins will increase slightly less: from $6,075 to $6,750 while the maintenance margin increases by $500 from $4,500 to $5,000. Margin increases will be largest for palladium, where initial margins will rise from $2,363 to $3,713, coupled with a maintenance margin increase of $1,000 from $1,750 to $2,750. Additionally, as the full advisory indicates, the CME increase margins by various percentage for virtually all of its product groups.


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Hephasteus's picture

I'm going to have to go with gold stampede conspiracy. Obviously 78 freaking billion dollars worth of fake gold sales weren't enough to collapse the market. So I guess they are going to try for a couple hundred billion. Set up some big event and make everyone think that gold is going to go in shitter for several months to try to rake it up. Should be a failblog video by march 15th.

wejn's picture

By big you, of course, mean something like $80 big.

I'd be very surprised if gold went under $1k in forseeable future.

Gold is relatively stable past few weeks if quoted in currency other than USD & further USD rally doesn't seem that likely.

For example look at gold quoted in CZK:

Master Bates's picture

The dollar's the shit right now, at least over the medium to short term.  I'd be careful about thinking it will continue to decline.

Master Bates's picture

The dollar's the shit right now, at least over the medium to short term.  I'd be careful about thinking it will continue to decline.

wejn's picture

Hmm, you might be right. I know next to nothing about timing and/or short term trading.

I just don't think technical analysis alone will get you anywhere. Not to mention the tunnel vision of dollar being the only safe haven no matter what BB does is also quite disturbing.

Everything's possible. Even paper gold $100. My point was that while gold had about 14% drop when USD denominated it's in quite tight range in other currencies (yes, even in EUR, with about 6.5% DD).

And while everybody's worked up about Greece (and rightly so) most ppl conveniently forget California and other US states that are about the same as Greece (or worse).

That's why I see the USD rally quite unlikely to last. Short term? Why not. Long term? We'll see about that.

Gold...Bitches's picture

Everything's possible. Even paper gold $100.

Yes, on paper at the CriMEX it may trade to $100.  I guarantee you're not going to find it in physical for that price that others will let go.

wejn's picture

I agree completely. That's why I wrote 'paper gold' in the first place. :-)

Gold...Bitches's picture

not disagreeing with you at all...  Just saying that a black market will appear with the paper and physical, as happened in late 08 and when silver gold got taken down you couldnt get your hands on any for the paper price.


Anonymous's picture


Rusty Shorts's picture

har har har har hehe

Anonymous's picture

Every time you post you seem to attempt to slam gold for some reason. Man up and admit you missed the $50 bounce the last few days.

Mr. Mandelbrot's picture

Keep writing those checks . . .

George the baby crusher's picture

Can't see it going much lower then $1050.  Any lower and the people of China are going to start revolting.  That's the level they told their people to buy.

Anonymous's picture

Watch what happen grasshopper

Raising margin = sign of desperation/manipulation every time

when you have cancer like AIG it is terminal

there's no cure, not even margin/paper flipping can fix


dumpster's picture

gold is bought in the market as a real purchase cash on the barrel head


these towering margin machines of paper are ready to implode into the hubris of nothing to back them up.

"Is it possible that gold is fed up with the lies and distortions that are so apparent Mr. Fred barks at the TV? It is, and I sense it happened today.

We have been discussing over the last few days the fact that no currency on the planet is any longer a storehouse of value. We are headed into a system of taking a ticket to get bailed out sovereign wise.

The relationship between leading currency and gold is never going to be cancelled, but it is loosening.

Gold is your only good insurance policy.

Who knows, we may be long gold for a much greater period of time and price than I anticipated in 2001.

Respectfully yours,
Jim sinclair

Burnbright's picture

Wait wait wait... you telling me that people could get gold futures of 100 ounces for only 5,403 dollars?

Anonymous's picture

cash settled, of course.

Anonymous's picture

No, the margins per unit cost/profit on those trades are up to $5,403 . The total cost of purchase would be much higher.

buzzsaw99's picture

Who buys paper PMs on margin?

dark pools of soros's picture

not proud of it but made 20% gain this week doing it...sold the margin part today

ReallySparky's picture

Can someone explain what this may mean to the price of silver and gold?

Master Bates's picture

It means that they're going down, for a variety of reasons.

Shameful's picture

Once again I find myself hoping that you are correct. So any idea how fast gold and silver prices will go down and where they might bottom at?

Master Bates's picture

I would say that they bottom under 1000, probably in the 900 range, and sometime near the end of this correction, which I forsee happening in the early parts of March.

That would be my "guess".

DoChenRollingBearing's picture

OK, Master B, you have walked the plank, and I admire your stubbornly held views.  If your "guess" (and I guess as well too...) is the bottom in gold is in the 900s, well:

"Beep, beep, beep" backing up the truck for gold and maybe other PMs. 

All this sh@t ain't going to end pretty.  (PIIGS in Europe) = (our California, Michigan, Illinois, New York, New Jersey, Florida, etc.).  Not even to mention our FEDERAL debts, etc., etc., etc.  Sux to be us now.

George the baby crusher's picture

And what happens if the US decides to have a go at Iran?

Anonymous's picture

It means precious metals are going up, because the shorts will have to pony up additional margin to hold their short positions.

Master Bates's picture

It means they're going down, because the gold bitchez crowd won't have as much margin to run up the price.

Burnbright's picture

I think you are both right, so maybe it just means that we get a more accurate price discovery for physical?

Master Bates's picture

Well, it seems like it'll get a bit of the distortions out of the market, at least for now.

I think that most of the "markup" in physical has to do with procurement costs and the like.  It's a lot easier to have and manipulate something on paper than it is to have the actual commodity.

Burnbright's picture

Agreed, sorry about earlier by the way bates. I seriously thought you were a troll. Now I just think you are an ass with a very strong opinion, nothing most people on this board couldn't be guilty of either.

Master Bates's picture

Well, it's better than having a strong opinion and being consistently wrong, like some others...

Anonymous's picture

Look who's talking. Mr Treasuries, you have been wrong time and time again.

Master Bates's picture

No, but I saw your mom's roast beef curtains.  They had moldy horseradish, and you could drive an airplane through.

Anonymous's picture

Cetin... or what ever the fuck your name is... go away. Saw your shit a while back at other places... you still fucking suck balls.


Anonymous's picture

Cetin you spamming mother eff'er!

Anonymous's picture

iamned is Cetin the clown spammer, all he does is pollute sites with his garbage

Hansel's picture

Is this the second margin increase?  I seem to remember reading about a gold margin increase a couple months ago.  Couldn't find much googling.

truont's picture

Right as rain, Hansel:

They raised the margin just before Dec 17th!!!

Fine by me--force all speculators into the physical.  Sounds like a plan.

Master Bates's picture

Removing speculators will be bad for the price of gold.

truont's picture

Right, it will be bad for the price of paper gold, no question.

Paper gold can go to $1 for all I care.

Master Bates's picture

Paper gold still represents physical gold.

Physical gold is pegged to the speculation in paper gold.

They're not going to decouple more than they already have.  If you want physical gold, you already pay more than the paper gold price.  (Try getting an ounce of physical for 1100 bucks if that's the price at the moment)  Still, the paper gold effects the physical gold.

Master Bates's picture

Attack my grammar all you want.  It doesn't change the fact that you're buying an overvalued asset.