War On "Speculators" Goes Global: Shanghai Gold Exchange Hikes Silver Margins For Third Time In A Month

Tyler Durden's picture

Globalization sure can be fun: just as the Fed has now ordained Japan to carry out the global reliquification scheme in the form of a new, and powerful batch of QE, so the regional war on (Fed liquidity engorged) speculators has just gone global. Following 5 consecutive silver margin hikes by the CME (which oddly did nothing on yesterday's price collapse even as the silver vol surged to near record levels) at which point it would appear silly for the exchange to continue its speculator eradication campaign, the memo has now been sent to foreign bourses. Sure enough, the Shanghai Gold Exchange has just announced it is hiking both the silver margin to 19% as well as the price limit on gold to 13%.

From Marketwatch:

The Shanghai Gold Exchange said Thursday it will raise margin requirements for silver futures as part of risk-control measures, its third round of increases in less than a month, according to a statement posted on the exchange's web site. Margin requirements will rise to 19% of a contract's value from 18%, while the daily price limit for the one kilogram silver forward contract will rise to 13% from 10% above or below the previous session's close. The new trading requirements will be effective from May 13. The exchange announced previous rounds of increases to margins and price limits on May 5 and April 25.

And the googletranslated release:

Today, silver Ag (T + D) price fluctuations, the night market transactions occur daily limit. Under the Exchange "deferred settlement trading rules" and "risk control and management measures" the relevant provisions, if Ag (T + D) contract to seal the close limit down, the exchange will enhance the Ag (T + D) contract margin ratio while price limits amplification range, please deposit an additional member to prepare well in advance of work and customer notification.

Enhance Ag (T + D) ratio and price limits margin contract specific content: May 12 at the end of liquidation, the silver Ag (T + D) contract to increase the ratio by 1 percentage point margin to 19%, May 13 the date of Ag (T + D) ratio of the contract price limits adjusted to 13%. If the Ag (T + D) Contract close open daily limit, no implementation of the above adjustments.

And so the heretofore localized war on "speculators" all of whom are merely trading with the trillions in excess and free liquidity created by the Fed, goes global. Bernanke will have you buying shares of Lulu instead of silver, if it's the last thing he does.

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johnnymustardseed's picture

Wow!  Concerted world wide effort to pretend that printing huge amounts of money does not create inflation......let me know how that works out!!

LawsofPhysics's picture

Yep.  The "paper" world brushfire is will escalate and is out of control.  Total disconnect between the paper and the physical.  I see paper is well on its way to zero while things in the physical world are most excellent.

Xibalba's picture

I can't find Silver eagles for less than $40 for immediate delivery. 

augie's picture

Short Paper, Long Physical. BTFD

spartan117's picture

Never used them, and don't know how their service is, but they're under $38 here:



writingsonthewall's picture

The UK has many of them - it seems the American citizen is getting ahead of the game.




The war on speculators is going global - and so, the reaction must be a global response too. Suck in the silver from wherever you can - don't worry too much about the FX loss as this will soon be made up when QE3 is finally announced.


This exercise is a test....a test by central banks to see how tough their opposition forces are. They cannot fail to go for QE3 now - look at the bad econommic news, look at the stock market's reaction to even the hint of an end of QE and think about the 1930's legacy "nobody wants to be the Fed chairman who takes the US back into depression"

I cannot see how QE3 will not be implemented. They're just trying to burn off any silver holders who are not committed to the cause - the cynic in me says this is so they can get themselves back into the market - right before they devalue the dollar once more.

They claim these margin hikes are to reduce volatility - but strangely this isn't a requirement in any other market - and not really a requirement in the PM market....until now.


The gloves are off folks.

writingsonthewall's picture

I like that site - an advert pops up after about 20 seconds and says


"every day you wait your dollar is worth less"


That just about sums it up - Rogers is right, this is a plateau where we have base camp and we're just about to set off for the peak.

vipobviously's picture

my base camp just got 20 oz ag heavier

boo yeah

Atlas Shrieked's picture

Re-post:  United States Gold Bureau are crooks.  None of their toll-free numbers work.  The "customer service rep" on chat "Bret" is totally shifty, giving phone numbers that don't work either.  I've reported them to law enforcement.

DosZap's picture

Ordered 200 Rounds last week, and was wondering where they are.

Called yesterday and said min 3-5weeks.

I said I have not had to wait on bullion from you guy's since '09, ASE's were 6-8wks out,as were Maples.

Drop that price bitchez, truck is empty, a fiat is burning a hole..

If this drops to where Armstrong say's, I may go insane, and FILL the truck.

Want a SHORTAGE?..........Heheheheheh, they have seen nothing yet.

This will backfire right in their ass.

1oz Silver?, $150.00 please?


Cash_is_Trash's picture

Total disconnect between the paper and the physical.

Much agreed, yet seems that investors and speculators don't grasp the idea that the dollar's intrinsic value, store of value and medium of exchange are worthless.

Out there, many trillions of dollars believe FRN's are "money", which is a bogus claim.

In recent weeks, we've seen the opposite to be trading and therefore in the short term markets are irrational.

ZapBranigan's picture


Irrational?  Absolutely, but I succeeded in correct timing and finally pulled a recent, decent haul in the sub thirty-two's baby.  Had to be up early for that one gents!

And save your breath Bath Fan, 'cause I'll continue to execute the same contract all throughout the twenties, teens, and single-digits.  Got it?!  Even though “the shit is fucking everywhere”, it's still costing me more than five dollars to pry out of the ground.  Too bad Au premiums instantly rise as spot goes down, otherwise Fourteen-Eighty would have been delicious.


blindfaith's picture

Humm, likely but things have a way of taking a long time to play out.  In the mean time the 'little guy' ( especially in China) is being encouraged to buy metal, but only if they can afford to...translation, keeping the price down lets more in to spread the base.  But we all forget that we are only allowed to play so long as the political and powerful permit it.  They control all the rules, not you or me.  Think, if you will, that the big banks can go short or long and not cover either bet, nor reveal their positions thanks to George Bush declaring their 'books' closed from a national security point.  And everyone thought they were going to kill JPM by buying sliver...JPM does not have to cover!  So, with such situations created by and for the rich and powerful, ask yourself how long will it be before trading in metal will be a crime (less medical and specific industrial exemption grants) because they make it so.  Everything is a moving target, nothing is static, and everything can be replaced by something else, and there is no blindfaith without costs.

Cash_is_Trash's picture

how long will it be before trading in metal will be a crime ... because they make it so.

Agreed. The idea of a "barbarous relic" is deeply entrenched in the bureaucratic and political elite's mindset. The politicos will outlaw the hoarding and trading (barter) with metal as a medium of exchange.

We are being squeezed into serfdom (via inflation) by using government ordained paper with little or no savings in real money.

LawsofPhysics's picture

Won't matter.  Black market trading is increasing as fast as the fiat fire is growing.

Cash_is_Trash's picture

A black market is only named so outside of state control or power, therefore, in asbsence (or state collapse) it is logical to say that black markets would not exist.

Yet, the kleptocratic, arbitrary power wielding state, usurped from uneducated, ignorant and unsuspecting subjects sets policy to the people's disfavor during its existence.

Gavrikon's picture

I'd move to Switzerland where I doubt that sort of thing would be tolerated.

Except that I don't have the price of admission.

DosZap's picture

Yes, they (Swiss) and MOST countries are making it impossible nearly to expat.

Cost's are unreal.

Two places left for citizenship asap.......and you lay down $300-$400k to get there.

Doña K's picture

As I have posted before, China helps the US to supress PM prices for different reasons.

The US wants prices lower so that the printing is less visible and for political reasons. China wants prices lower, so that it can load up on all finite commodities. When Benny wakes up on what's happened, it will be too late.

Ray1968's picture

exactly what I believe.

Just when you think you know the game, the rules change. I like physical because it still will not be worthless. (Despite Soros and Blythe, and Kung Po Chicken)

Vincent Vega's picture

Completely agree with Dona K and Ray 1968 and will add this: the US debt ceiling is the gorilla in the room. The bankster's and politico's haven't figured out how to sell the world on the fact that they need to raise the ceiling by at least $2T to keep the ponzi alive. Fiat's are just that...fiat's. I'll gladly take more metal's at supressed prices.

fockewulf190's picture

Well, the insider trading stats ZH put out the other day shows 565 sellers for every 1 buyer.  Although this isn´t the all-time sell to buy ratio (only because so many insiders have long hit the high road), it´s obvious the Wall Street ponzi spiel is about to bust and these people are running for the exits.  These cash flushed insiders now have depressed PM prices to load their personal yachts with and sail to safe havens.  How convienient the timing.

LawsofPhysics's picture

Believing in "safe havens" will be their downfall.

firefighter302's picture

"Believing in safe havens will be their downfall".

Roger that, C'mon.



Cash_is_Trash's picture

When Benny wakes up on what's happened, it will be too late.

Ben can't wake up nor someone perturb his sleep. The man is too blind a follower of Keynesian policy that he knows of nothing else than to increase printing.

As noted before on this thread, PM's may one day become banned from use in private transactions, making 'we the people' utilize a fiat currency that will die like all paper currencies have.

The elites hate metal, they dread it, the bansksta's depise it because it ruins their little game of playing god.

I think we need a thread discussing the implications of hoarding and transacting metal at a time when it's deemed illegal.

TaxSlave's picture

Ha! Try making silver coins contraband when you have a generation of people who grew up defying pot laws.  Let's see how that works out.

spudboy's picture

"The elites hate metal, they dread it, the bansksta's depise it because it ruins their little game of playing god".

Actually, I think the elites both love and fear metal, it's just that they hate it when the little guy has some too. They perfectly understand the role of AU/AG in preserving purchasing power, but want it all to themselves, and thereby strongly discourage its accumulation by all others.

FunkyMonkeyBoy's picture

The New World Order is here. What? You thought it was all a conspiracy 'theory'?

achmachat's picture

Please help me out here... isn't raising the margin requirements on silver an awesome thing for people who are very long silver?

Catullus's picture

Falling prices are an awesome thing for people who are very long silver. 

web bot's picture


So you're good at calling the silver market. What in your opinion do you see as the bottom?


tmosley's picture

In the long run, yes, because it encourages people to stand for delivery and drains physical supply between the time of the price crash and the time that retailers raise their premiums.

The COMEX is now doomed.  They won't be able to bring silver onto the market at these prices, so they won't be able to make delivery.

Despite the ranting and celebrating of the trolls, this is the endgame for them.  Anyone caught without gold and silver is going to be very sorry.

bob_dabolina's picture


Remember making fun of me for going short silver a day and a half ago? Guess what? You called the top 24 hours before a new low was made. 

Good job Kemo Sabe. If you keep up this kind of track record you're getting me a fleet of Bentleys.

Bicycle Repairman's picture

So you were aware two months ago that margin hikes were coming?  I don't think so.

bob_dabolina's picture

I'm aware of everything. If you look at my track record for making calls (which I occasionaly do here publicly), it is close to immaculate

And yes, two months ago I was saying to sell silver and laughing at people like tmoe (and his yuppy followers acock and Flaccid Head) predicting $60 when it was trading @ $49...

And if tmoe is going to keep hitting the button like this, I'm taking early retirement on my privately owned island.....he is THAT good.

wirtschaftswunder's picture


They can only see the bubble months afterward because they are neck deep in shit.

Any asset that is centrally priced from an exchange is a rigged price and subject to speculative mania and game changing moves by the exchanges, i.e. lenders..

Conditions for an asset bubble:

1-An easily understood asset 2-Easy credit to fund purchases and leverage the asset 3-Wide media encouragement to acquire the asset 4-Banks creatively assist in the enhanced supply of the asset 5-Wide public aceptance of the wisdom and safety of ownership



fiftybagger's picture

Hahahahaha.  Hey genius, silver fails all 5 of those conditions.  Wow, what a maroon!


The Silver Bubble Debunked


firefighter302's picture

Bob Dabolina said,

"I'm aware of everything".

"If you look at my record, it is close to immaculate".



tmosley's picture

And yet the day before that when I said I was bearish because it looked like intervention was going to continue (which it is now apparent), that paper would trend towards zero on high volatility, but it went up a little bit, you claimed victory then too.  That is called VOLATILITY.  That means that any little shit like you can tell me how "wrong" I am, even though I predicted exactly what is happening.

It seems clear that the COMEX is in its death throws.  Paper will continue to trend towards zero on extreme volatility, Bob will continue to tell me that I am wrong by picking points (this being a traders market literally anyone could make a bunch of money), my physical will continue to sit happily in my safe as I continue to add more until the COMEX publically defaults within the next two months, because the low paper price has made it impossible for them to source metal.

Also, funny that on one hand, you are telling me to "STFU STFU STFU" while on the other hand you claim to be making so much money off of me.  Seems like a contradiction.  But then, trolls like you are nothing but contradictions.

wirtschaftswunder's picture

You were calling for $49 by last Friday urging all ZH to buy! You said you had a 400% profit last nite and today its 240%. You are a liar. You think taxes are paid on physical gains. You dont know fuck. You think physical prices are not tied to futures prices. You are the world's biggest fool because you are incapable of being a half-assed con man.

tmosley's picture

Ok, put down the crack pipe.  400% profit from when I went bullish on silver, 240% profit on my cost average.

And $49 last Friday didn't discount 6 more margin hikes.

Wait, you think you DON'T pay taxes when you sell your silver?

Now I know why you live in a van on the beach.  Must have been nabbed for tax evasion.

Abitdodgie's picture

Who pays taxes that's like so 80's , don't forget taxes are voluntary

bob_dabolina's picture

I don't care anymore tmosely. I'm done with silver @ the moment, I had my fun there. 

It's time to start shorting bonds, do it here. 

Live long and prosper.

tmosley's picture

What, getting off the gravy train so soon?

May your paper burn bright for a spectacular funeral pyre.

Mercury's picture

Restricting leverage may tame some PM speculation volume but in the long run it won't change fiat currency fundamentals.