Silver Margin Hikes Begin... And Nobody Notices

Tyler Durden's picture

You didn't think they'd forget did you. We predicted last week that the exchange would imminently hike silver margins. Well, our prediction was just a little off (and far more spot on than all those speculations about a weekend Greek restructuring and/or Chinese revaluation). As expected, the Shanghai Gold Exchange just announced it had raised the level of deposit required for its
silver forward contract by 3 percent and may roll out further
measures to curb excessive speculation and manage price
volatility.
According to the SGE, margins on its silver [Ag (T+D)] forward
contract would be raised to 15 percent from April
25 compared with the previous 12 percent, according to a notice
posted on its website. Silver did not even pretend to react on the news. And the upcoming silver hike by the COMEX will have absolutely the same effect.

From Reuters:

The SGE also it would raise from Tuesday the daily price limit for the contract, which has a lot size of one kilogram, to 8 percent over or under the previous session's settlement from the previous 7 percent.

"Should the market continues to show signs of overheating, the exchange will implement other measures such as raising the deferred rates to improve risk controls," it said.

The SGE's silver forward contract has soared in recent months in line with the meteoric rise in the U.S. silver futures contract. It was up 5.5 percent at 10,652 yuan ($1,637) a kilogram at 0624 GMT, bringing its gains so far this month to 33.6 percent.


h/t Steve

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
GS is short Gold's picture

Well, the Chinese are aggressive in trying to contain bubbles. And there's no bigger bubble forming now than the one in silver.

EscapeKey's picture

You mean, except for ponzi scheme US Treasuries?

Dont Taze Me Bro's picture

I would fully support COMEX's decision to raise Silver margins. This thing is now fluctuating $3 per day. That's almost 2X the current daily maintenance.

I am surprised people at ZH think this is a bad thing.

 

 

 

bothsidesnow's picture

Forget it you can't educate fools that will be crying a river of tears soon.

By the way silver in my spot Forex account peaked at 49.87 and dropped to 49 and has been range bound between 48.90 and 49.30 for the last 4 hours.

EscapeKey's picture

OHNOES IT'S NO LONGER PARABOLIC.

Funny how these "uneducated fools" have been dead right for the past year. But hey, whatever floats your boat, Apr11 anti-PM flavour.

markmotive's picture

I begin to worry about an asset class when I see these kinds of daily price gains.

 

EscapeKey's picture

I don't disagree, but that's what hedging is for. My main gripe was the condescending tone.

mrgneiss's picture

2010 Silver institute stats:

Silver 2010 total fabrication and investment demand: 1056.8 Mozs

Silver 2010 total mine supply (including by-product): 735.9 Mozs

The shortfall is made up by government stockpiles and scrap supply.  Government stockpiles are dwindling, and you can only sell the family silverware once.

http://www.silverinstitute.org/pr07apr2011.php

The trolls may be partially right in that we may be close to a near term top, but the silver story has a while to go.  Primary silver miners are running full out, a few new mines will be brought into production over the next 1-3 years, but most new silver production is at least five years away if not more.

We could see a temporary crash when Ben announces that QE2 will not continue - but I suspect it will continue in some form.  The government faces deflation, falling taxes and debt default if they completely cease printing, and devaluation and inflation if they keep it up.  Most everyone here knows this, and Ben has said he would choose the latter.

Bottom line, any comparisons with 1980 are fallacious and misinformed at best, or done by ignorant idiots or those with an agenda at worst.

So if you hold physical don't worry, if you're playing silver on margin protect yourself, and if we do see a nice correction that will be the time load up.

Math Man's picture

But industrial uses were only 487mm ounces.... or less than half of supply. 

Speculative demand by idiot ZH readers is what is driving this bubble...  it is up 150% in a year!!!!!!!

Calculated_Risk's picture

yeah, dollar debasement has NOTHING to do with it. At all! fuck off troll.

Math Man's picture

If it was dollar debasement, Gold would have more than doubled in the last six months too...

But it's hasn't.

Nothing but a speculative bubble driven by idiots who think the dollar is devaluing, when the reality is DXY is as the same level is was 3 years ago, while silver has moved up 5x.

We'll be back below $20 this summer.

Ahmeexnal's picture

And the US/European/Japanese debt will be back at 2008 levels this summer too?

Your complete lack of analitical skills coupled with your double digit IQ is a sure recipe for disaster.

Why don't you just take a permanent ride on your Ferrari?  With gas prices about to go back to 2008 levels, you must be glad your piece of shit car is a very efficient one at burning fuel.

Charlie Bravo's picture

"We'll be back below $20 this summer."

I recall some fool predicting $8 LAST summer....

Charlie Bravo

Ruffcut's picture

You are a moron. Demand is demand and spec or not, people demand it and so the price goes.

The more it is hoarded off the market, the more it goes up.  Most that have physical will keep it under hell freezes over. I could give a shit if it went back to 20. It is a long term hold.

riley martini's picture

 The Chinese are the big buyers . King World market wrap.

mrgneiss's picture

Yes, all the people buying in India and China were completely influenced by Zero Hedge.  Zero Hedge is very big over there, despite the language issues.

2010 silver industrial demand up 20% - was that because of Zero Hedge as well?

2010 investment demand - up 40% - a good amount but far from a frenzy when the worldwide total silver investment is $5.6 billion, for one year, isn't that like 2% of Apple's market cap?  .01% of daily forex flows?  etc

http://www.silverinstitute.org/pr07apr2011.php

Like I said, their probably will be pullbacks, but it will take at least 2-3 years for silver supply/demand to come back into equillibrium.......albeit at a much higher price than now

latcho's picture

that's a compliment wright ?

latcho's picture

just wait until the "Idiot ZH'rs" diversify to water :D

Snidley Whipsnae's picture

Continue to worry... While I am counting profits.

Snidley Whipsnae's picture

Two new trolls? That's all? I figured at least a half dozen new ones would show up this am. lol

Load em up with negs... No sense trying to debate a troll.

EscapeKey's picture

"Never debate a fool, he will drag you down to his level, and then beat you with experience."

Thomas's picture

I posted that as my "Quote of the Day"

Long-John-Silver's picture

I figured at least a half dozen new ones would show up this am.

 

Remember; you must wait to be approved to post.

Lord Welligton's picture

has been range bound between 48.90 and 49.30 for the last 4 hours.

Why are you emphasising the last four hours?

Here's a chart since the beginning of April.

http://www.kitco.com/scripts/hist_charts/monthly_graphs.plx

ivars's picture

Now it is 47,76. In crash, short term last hours are very importants as we pass through the peak.

 

http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&st=0&sk=t&sd=a&sta...

Hephasteus's picture

"Forget it you can't educate fools that will be crying a river of tears soon."

Ya we are going to cry. Our girlfriends our going to leave us. The dog will stop wanting to hang around us and run away. We'll be losers. We're just big stupid idiots. It's going to be horrible all the terrible terrible things you will do to us. It's going to really suck and likely generate a huge amount of regret. The regret will be a never ending ordeal of some sort. We'll be laughed at. Butthurt. Forever full of some massive amount of sorrow and misery.

SWRichmond's picture

+1.  I bought my silver at $14.00.  It would take a lot to make me shed a single tear.

Hephasteus's picture

I'm completely dead inside.

I got cuts all over my hands from sharpening axes and knives and stuff. Sharpened till mild pressured swipe produces a cut.

Put a new blade in the hack saw just in case they want to take this to the really ugly level.

I don't care about winning or losing or tallying up gains or losses. I just want these psychopaths under a goddamn thumb and quick. All the people spouting religious bullshit all easter is NOT a good sign.

EscapeKey's picture

All the people spouting religious bullshit all easter

??? It's easter, what did you expect???

Ruffcut's picture

Cuts from sharpening?

They make something for that. THEY"RE CALLED GLOVES.

SWRichmond's picture

Waiting is hard, and hard on us.  Take a walk outside in the sun.

I had an awesome salad for lunch yesterday: radishes and lettuce from my garden with a little olive oil and goat cheese.

Edit: I am glad I am not a young man.  The patience that I now have is both an asset and a liability, but lately mostly an asset.

Creed's picture

I'm completely dead inside.

 

 

all you that labor & are heavy laden, come to me and I will give you rest- JC

 

by Hephasteus
on Mon, 04/25/2011 - 08:16
#1203016

 

I'm completely dead inside.

I got cuts all over my hands from sharpening axes and knives and stuff. Sharpened till mild pressured swipe produces a cut.

Put a new blade in the hack saw just in case they want to take this to the really ugly level.

I don't care about winning or losing or tallying up gains or losses. I just want these psychopaths under a goddamn thumb and quick. All the people spouting religious bullshit all easter is NOT a good sign.

Twindrives's picture

Whatever.   The biggest bubble in history is the U.S. dollar.   The biggest liar in history..... is a toss up between Boy Barry Soetoro and Ben Shalom.  

slaughterer's picture

" And the upcoming silver hike by the COMEX will have absolutely the same (no) effect."

Depends on how much the COMEX hikes.   The Asian hike was benign.

FOC 1183's picture

Are food stamps considered acceptable collateral?

The Navigator's picture

Why not - FRNs are - all paper, all phony.

I love the sound of real money, silver tones.

Moe Howard's picture

I'm overheating. Please someone raise my margins.

Blotsky's picture

Ha! I can hardly understand half of what is being said but I know damn well that in the end this isnt going to be nice... unless you own silver... which I dont...

Liquor works wonders with stress.

topcallingtroll's picture

You can learn it all if you stick around and google some definitions and lingo. This is the best place to watch the runaway train. Maybe they will get it under control, maybe not. Enjoy the show.

Moe Howard's picture

Thanks for the idea.

 I will pour some taxpayer subsidized corn ethanol on my margins and see if the superior evaporation rate will cool them sufficiently.

 

 

 

<HELP> For Explanation

Lord Welligton's picture

see if the superior evaporation rate will cool them sufficiently.

Would that work on spent fuel rods?

Moe Howard's picture

Worth a 'shot' I would think.... BOOM!

nmewn's picture

And Curly says...Hey Moe!...they're printing out the subsidy now!...ykkk ykkk ykkk...whooop whooop whooop!!!

+ 1

Moe Howard's picture

+1930's for the stooges reference continuation! Pop goes the weasel.

4horse's picture

am sorry.

 

liquor . . .       . . . find a woman

         water.wetter

     everything you got

 

.  .  .  out of which, May----->thru Summer, you might get another shot

as The Fed may make'em beg for its QE and correct'em into the bargain, both taking down/and shooting the moon, as its silvery beams prove a last silver lining

q.e.d.

 

 

 

 

Buckaroo Banzai's picture

Fart, meet Hurricane.

akak's picture

And there's a nicely jagged 2X4, airborne at 180 mph, with the name "JPM" written on it.