• Sprott Money
    05/06/2016 - 06:03
    The US, in its own decline, is showing this same self-destructive tendency. The worse things get, the greater the inclination of the citizenry to say, “Carry on, everything’s fine.”

CME Lowers Gold Margin By 9%

Tyler Durden's picture


Adding to the confusion, for some, that is today's trading session, here comes the CME which in a post-closing announcement, proceeds to hike outright margins on a variety of petroleum and freight products, but more importantly just cut the margins on gold by 9%. Is it that time when the establishment is clearing the path for everyone to rotate out of equities (and/or bonds) into gold, just to set the trap and pull the trapdoor once everyone is once again left holding paper gold? We shall see, but following tonight's selloff, gold is now less than 5% less than stocks YTD. It may well be up to the last trading session of the year to determine who wins in 2012: rock or paper.

Source: CME

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Fri, 12/28/2012 - 18:57 | 3103383 ACP
ACP's picture

Rock or paper? I say scissors...to the Bernank's NECK.

Fri, 12/28/2012 - 19:01 | 3103392 strannick
strannick's picture

The CME lowers gold margins while Shanghai rises them. The difference is of course that in Shanghai you get gold, while at COMEX you get earnest assurances from Jeffrey Christian and Bart Chilton.

Sat, 12/29/2012 - 08:15 | 3104352 GetZeeGold
GetZeeGold's picture



Don't count your chickens....until you actually take delivery.


There is a reason drinks are free at the casino....they don't want you to actually take your chips and leave.

Sat, 12/29/2012 - 09:15 | 3104407 This just in
This just in's picture

Chacken and chips.  FUck you, now I'm hungry!

Sat, 12/29/2012 - 09:47 | 3104425 GetZeeGold
GetZeeGold's picture



Good thing I didn't reference watermelon.....probably would have got my ass smoked for that.

Fri, 12/28/2012 - 19:29 | 3103516 Silver Garbage Man
Silver Garbage Man's picture

I don't care who wins 2012....I know who is going to win the ultimate championship .....SILVER and GOLD.

Fri, 12/28/2012 - 19:40 | 3103569 ball-and-chain
ball-and-chain's picture

There's no way I'd buy a gold ETF.

I don't trust these people.

They get to commit crime in broad daylight and continue to walk the streets.

The mattress is the best place for my money.


Fri, 12/28/2012 - 19:47 | 3103588 DoChenRollingBearing
DoChenRollingBearing's picture

Physical cash and physical gold is not a bad strategy.  It is easy to explain as well.

Fri, 12/28/2012 - 18:10 | 3103208 Killuminati
Killuminati's picture

need more reason why gold is gonig to crash? trying to get the little guy in. 

Fri, 12/28/2012 - 18:14 | 3103223 sitenine
sitenine's picture

Right. Because the little guy is buying on margin... idiot.

Fri, 12/28/2012 - 18:18 | 3103237 kliguy38
kliguy38's picture

correct....the game is to drag in some of the hedge funds into the next fire zone. There is a desperate need to hold the price inside a range and without some weak hands getting on board they cannot pull it off. Its always about the weak hands and the paper trade is just about destroyed the suckers. gl

Fri, 12/28/2012 - 19:13 | 3103437 sessinpo
sessinpo's picture


This is the CME, that means futures, commodities trading. WHO isn't buying on margin?

If you had any actual knowledge on trading, EVERYONE is on margin - even the big finanicial firms. The is the enticement of this business - that is the business model.

You have HIGH leverage BECAUSE you are have very little upfront cost to control large amounts (contracts). That also means HIGH risk.


Fri, 12/28/2012 - 23:42 | 3103701 sitenine
sitenine's picture

No shit (kliguy38 made the same point above your comment an hour earlier btw), but thanks anyway - not that I really even care. I'm not a trader, wouldn't be a trader, and wouldn't befriend a trader. Traders are just tools with a license - most of them are phone monkeys. All this means is that paper prices will go up based on the pumped up liquidity in the sector translating into a higher spot on phyz, so: 1. buy more physical over the weekend when no 'trading' is going on 2. watch the spot rise moderately as the ES shrinks next week 3. patiently wait for another buying opportunity 4. rinse and repeat for as long as the system holds together. Beyond that, how many 'little guys' out here really care what the margin is?

[edit] I suppose I should add this disclaimer: This comment is just one idiot's opinion. I am not offering you advice!

Fri, 12/28/2012 - 18:19 | 3103241 bidaskspread
bidaskspread's picture

Because Jim Cramer recommended it in yesterday's show.

Fri, 12/28/2012 - 18:21 | 3103247 agent default
agent default's picture

It's the little guy buying gold and silver coins that is screwing them bozo.  He cannot enter the paper market anyway. 

Fri, 12/28/2012 - 19:10 | 3103444 Frozen IcQb
Frozen IcQb's picture

That makes sense but only in theory.

The little guy doesn’t even know what gold is other than jewelry sold for cash at pawn shops.

Fri, 12/28/2012 - 20:03 | 3103659 logicalman
logicalman's picture

This little guy does, and has for a long time.

Well hidden Phys is the best!

Fri, 12/28/2012 - 23:34 | 3104102 WTFUD
WTFUD's picture

. . . the little guy is the UK banks. .

Fri, 12/28/2012 - 18:12 | 3103212 TheSilverJournal
TheSilverJournal's picture

How long until the paper gold door slams? $5,000? $200 oil? $300 silver? $10 milk?

Fri, 12/28/2012 - 18:47 | 3103348 Papasmurf
Papasmurf's picture

$10 milk happens first.  

Fri, 12/28/2012 - 20:04 | 3103663 logicalman
logicalman's picture

Milk is not a good long term investment.

Cheese is different.

Fri, 12/28/2012 - 21:50 | 3103898 This just in
This just in's picture

cheese is a derivative of the milk carry trade.


But if you hold the teet, you get a dividend.

Sat, 12/29/2012 - 15:15 | 3104890 Theosebes Goodfellow
Theosebes Goodfellow's picture

$10 milk, (well, $8 anyway), sooner than you think:



Fri, 12/28/2012 - 19:14 | 3103456 CPL
CPL's picture

Come to Canada...gas is cheaper than milk.

Fri, 12/28/2012 - 21:51 | 3103901 This just in
This just in's picture

If milk gives you gas, then it's way cheaper.

Fri, 12/28/2012 - 23:04 | 3104051 Intoxicologist
Intoxicologist's picture

And beer is cheaper than gas.

Drink! Don't drive.


Fri, 12/28/2012 - 19:36 | 3103552 auric1234
auric1234's picture

The lower it is, the more dangerous to their ponzi because physical buyers take the opportunity.

So yes, please keep smashing paper gold down.


Fri, 12/28/2012 - 18:20 | 3103215 TraderTimm
TraderTimm's picture

CME needs more muppets for the next paper trading gold smackdown.

Also, looks like CME is getting more desperate regarding their trading volumes. They're running a deal with a data provider Kinetick, to provide certain CME quote feeds for free.

I don't work for either organization, in case you want to know - I just think its amusing they're having a firesale on quote data, which is one of their primary income flows.

From the Kinetick FAQ:

Q: Why is this being offered?

A: The CME Group is interested in generating trade revenue. They understand that making data, news and tools available to traders will help drive volume on the exchange.

(Emphasis mine.)

Couldn't happen to a better group of people, eh?


Fri, 12/28/2012 - 23:40 | 3104107 WTFUD
WTFUD's picture

CME = Coke Meth Exchange

Sat, 12/29/2012 - 11:36 | 3104489 cbaba
cbaba's picture

Trader tim, excellent point, but i would say Yes and No.

Yes, It is Correct that CME is getting more desperate regarding their trade volumes. But, generating trade revenue is the noble cause, not the real cause.. The real cause is the suppression of Gold and Silver price but they will never disclose this truth in public..

If the trade volume drops, the whole rigged game will be exposed, they will loose control of this game of suppressing physical price of gold thru paper gold. The trade will go to somewhere else ( London, shanghai, spot etc.) and there will be more and more difference between the paper and spot price of gold until the whole paper control business explodes and physical gold price skyrockets. 

Remember when the Nixon closed the gold backing by gold in 1971 its the same year this CME is established. They are not there to make money, their only purpose of existence is to control the price of gold ( and silver).

They are very powerful, they have their backing by the biggest us banks, fed, us government, they have all the money they can burn, they can change the rules, they may even declare Force Majeure and not deliver you the promised physical if you decide to take a delivery at the end of your future contract but they have one weak spot, the Volume...




Sun, 12/30/2012 - 06:12 | 3106150 Pegasus Muse
Pegasus Muse's picture

CFTC Whistleblower & Independent London Metals Trader Andrew Maguire has over 40 years experience as a metals trader had some interesting comments on silver in a recent interview on KingWorldNews:


Maguire also added: “One of the things I wanted to talk to you about today was something I saw in Shanghai early this morning. Eric, I had to double-check, in fact I had to triple-check. We’re talking about the kind of divergence (in the physical market) now that’s unprecedented.

Today I looked at the opening premiums and there was a $2.89 disparity in silver. I’m not talking gold. When spot silver was trading in London at $29.61, silver actually traded at $32.50 (in Shanghai).

If you take an equivalent Comex contract, and I realize spot isn’t Comex, but if you take an equivalent 5,000 ounce Comex contract, that equates to a $14,430 premium per contract. I mean it’s ludicrous. There are reasons why you may or may not have a premium in Shanghai, but not to that extreme.

Shanghai (softened but) still closed at a $6,100 premium to equivalent Comex contracts. So what we’re saying here is that the divergence has now become ridiculous. I mean these high and low closing premiums literally illustrate the massive divergence between the paper market (and the physical market).

And, Eric, this is on an exchange (Shanghai) that within the next two years is actually going to become the world hub of physical gold and silver trading. It’s going to have its own fixes. So I think they (the manipulators) really pushed it a little too far today.

You’ve (also) got the short-selling algorithms, and they have absolutely no or little if any input relating to the physical market. So if this price turns against them, they are not going to understand why it has turned. They won’t understand the fact that central banks have been buying 6, 12, 20 (tons of gold), and I still haven’t even got the numbers for today, but there was very large physical take-up (today as well).

So when it (price) turns, they are not going to understand what’s happened, they will just follow it. But the concern to the bullion banks (here) is they are fully aware of the physical drain, and I absolutely guarantee you that they are going long on this final stage of the selloff.

Price up to now has really been assisted by (US) government defense of the dollar in the over-the-counter FX gold markets, but the central banks (out of the East) and the bullion banks are (now) jointly buying this discount.

Part 1: http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2012/12/22_Andrew_Maguire.html

Part 2: http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2012/12/23_Andrew_Maguire__Part_II.html

Fri, 12/28/2012 - 18:12 | 3103217 DoChenRollingBearing
DoChenRollingBearing's picture

Bastids!  It's a trick!

Raise the margin to 100%!  Do it now!  Physical only!

Fri, 12/28/2012 - 18:27 | 3103276 e_goldstein
e_goldstein's picture

but, but if they do that, then there can't be any moar price manipulation, I mean discovery.


Fri, 12/28/2012 - 18:38 | 3103309 DoChenRollingBearing
DoChenRollingBearing's picture

We'll live...


Fri, 12/28/2012 - 19:28 | 3103507 Sudden Debt
Sudden Debt's picture

bought gld yesterday morning and while gld is down, my options rose 17% today.

volume is dropping and people will buy.
Sometimes it's good to play along as long as your the first one out.

and yes :) I'll buy the real stuff with the profits :)

Fri, 12/28/2012 - 19:32 | 3103533 DoChenRollingBearing
DoChenRollingBearing's picture

Good for you, Sudden Debt!  The Bearing was NEVER able to trade with success, and so declines to play in that casino.  Physical only.


Weird..., your (avatar) arms were not flapping until I greened you, weird...  Must be a conspiracy...

Fri, 12/28/2012 - 21:54 | 3103913 lasvegaspersona
lasvegaspersona's picture


I down arrowed you just to see if I could make your arms stop moving (see Bearings comment)....they are still flapping.

Sat, 12/29/2012 - 15:21 | 3104901 Theosebes Goodfellow
Theosebes Goodfellow's picture

I don't know what's wrong with you, DoChen or you, LVP, but SD's arms always flap for me.


Sat, 12/29/2012 - 00:06 | 3104145 WTFUD
WTFUD's picture

. . . lent out one of my ounce gold Oz nuggets to my dope dealer who promptly did a runner. . . . am sober now. .

Sat, 12/29/2012 - 06:40 | 3104344 Global Hunter
Global Hunter's picture

Down vote for being sober

Sat, 12/29/2012 - 12:20 | 3104536 mvsjcl
mvsjcl's picture

Further down vote for adding to the gold lease scam.

Fri, 12/28/2012 - 18:25 | 3103229 The Gooch
The Gooch's picture

I offer minimally destructive testing with WEDM .

"If you can't see it, you don't own it.


And BTFD. Whatever that may be.

Fri, 12/28/2012 - 18:18 | 3103236 agent default
agent default's picture

They are becoming irrelevant and they have finally noticed it.  Too late.

Fri, 12/28/2012 - 18:19 | 3103240 fonzannoon
fonzannoon's picture

Yes yes paper gold....on margin....yes have some.

Fri, 12/28/2012 - 18:28 | 3103279 ThirdWorldDude
ThirdWorldDude's picture

The chocolate is on the house...

Fri, 12/28/2012 - 18:20 | 3103246 Frozen IcQb
Frozen IcQb's picture

Oh Please! Here we go again....

They must get that last day trader in Albuquerque

Fri, 12/28/2012 - 18:22 | 3103258 The Gooch
The Gooch's picture

Kevin was spotted at a meth house!

Fri, 12/28/2012 - 18:27 | 3103251 francis_sawyer
francis_sawyer's picture

Joobankers need to set the trap for a year end paper smackdown so they can spend their joobuck bonuses on physical... It's as simple as that... Pretty much the same thing happened last year at year end...

Of course ~ I'll get some JUNKS for that comment because there are some smart people with PhD's out there who will ASSURE you that markets aren't manipulated... This is absolutely NORMAL... & that francis_sawyer is delusional... [even though francis_sawyer has never set any traps, nor stolen money from anyone]...

Fri, 12/28/2012 - 18:43 | 3103326 A. Magnus
A. Magnus's picture

I junked you for trotting out the Hitler rhetoric about 'joobankers.' Of all the losers you could pick for a role model, that calls into question ALL of your subsequent analyses...

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