CME Cuts Gold, Silver Margins

Tyler Durden's picture


Any trader of paper gold and silver will likely never forget the endless and certainly parabolic barrage of margin hikes that the CME imposed in the spring and summer of 2011 which had only one purpose: to break the back of the relentless anti-fiat rally in the precious metals (and which culminated with the historic May 1 take down of silver when the metal plunged some 15% in the span of seconds). Since then, perhaps as a result of initial and maintenance margins still at residual levels indicative of when the S&P was some 30% lower and some $4 trillion less in slushing global central bank liquidity, the upside euphoria in gold and silver has been decidedly hobbled, perhaps so much that the CME is now scrambling to find a whole new set of gullible investors who will obediently put their money in the paper trap, only to see a surge followed by yet another mauling from soaring margin demands. After all, the CME needs trading volume to keep the cash flow flowing - killing the paper market in any one product suits nobody. Sure enough, moments ago, the CME once again cut margins in a slew of products, most notably gold and silver, by some 10% and 14%.

Good luck CME with finding people gullible enough to trust you this time around.

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Thu, 02/07/2013 - 19:41 | 3224527 trav777
trav777's picture

waaaah waaaah waaah manipulation

Thu, 02/07/2013 - 19:55 | 3224538 nope-1004
nope-1004's picture

FB and AAPL longs got blowtorched, hey trav?  lol.

I remember the 15% waterfall on that fateful Sunday evening during slower Asian futures trading.  Seems rather odd that they "found" Osama that same day.  Ya, no manipulation here..... lol. 

Thu, 02/07/2013 - 20:09 | 3224597 Muppet Pimp
Muppet Pimp's picture

Be long sovereign blow torches here. 


Thu, 02/07/2013 - 20:26 | 3224631 Manthong
Manthong's picture

“Attention K-Mart Shoppers, in aisle 15 under the flashing blue light, for the next 15 minutes we have an up 14 percent discount on the cost to secure claims on genuine fake precious metals. Get yours now in order not to miss the next paper contract sucker slam event. "

Thu, 02/07/2013 - 20:34 | 3224656 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Trav you are such a fool when it comes to silver.

Thu, 02/07/2013 - 21:09 | 3224741 Long-John-Silver
Long-John-Silver's picture

Trav is simply the latest iteration of Math Man. He will "disappear" as well.

Fri, 02/08/2013 - 01:10 | 3225207 FEDbuster
FEDbuster's picture

In case you haven't seen this two minute clip of Kyle Bass explaining the fractional reserve COMEX, and why U of Texas took delivery of their billion dollars of gold bullion:

It's really all you need to know about paper gold, ETFs, etc....

"If you can't stand in front of it and defend it with an AR-15, you don't own it" Ann Barnhardt


Fri, 02/08/2013 - 04:46 | 3225316 dunce
dunce's picture

If i was 40 years younger i would want to marry Barnhardt, she is not bad looking and has a real fine mind. Some women have fine behinds but not after 20 years, some times not after 10 years.

Fri, 02/08/2013 - 00:44 | 3225174 trav777
trav777's picture

why, because I didn't buy with both fists at $49, like you did?

Fri, 02/08/2013 - 03:52 | 3225290 dwayne elizando
dwayne elizando's picture

Somebody didn't get his xanax prescription filled huh trav?

Fri, 02/08/2013 - 10:18 | 3225612 Agstacker
Agstacker's picture

He can't afford it...

Thu, 02/07/2013 - 20:41 | 3224671 xtop23
xtop23's picture

Fool me once, shame on you..... and all that. Nobody with an IQ higher than a parameceum is going to play that game again. Take physical delivery and sleep soundly.

Thu, 02/07/2013 - 21:03 | 3224727 Frozen IcQb
Frozen IcQb's picture

I resemble that remark!

Thu, 02/07/2013 - 21:43 | 3224813 tenpanhandle
tenpanhandle's picture

Unfortunately the world is long on idiots.  Plenty of suckers still out there.

Thu, 02/07/2013 - 22:43 | 3224920 Thomas
Thomas's picture

long equities/short brains

Thu, 02/07/2013 - 22:55 | 3224946 RockyRacoon
RockyRacoon's picture

I disagree with the idea that there will be a failure to lure the apes into the paper metal nets.

P. T. got it right:

"There's a sucker born every minute"

Wishful thinking on the part of Tyler this time...

"Good luck CME with finding people gullible enough to trust you this time around."

There's always a game if ya wanna play.

Thu, 02/07/2013 - 23:26 | 3225027 francis_sawyer
francis_sawyer's picture

I agree with RR... A classic 'cast of characters' might be the ones who RODE THE S&P all the way back up to the top [against the warnings of the doomer goldbugs]... Now that we're at that point, maybe a few of them decide to be real coy & take some chips off the table in 'stawks'... Move on over into paper commodities... Brag about their keen market 'TIMING'...


Fri, 02/08/2013 - 00:07 | 3225116 Manipuflation
Manipuflation's picture

I agree with RR and F_S.  Not that it matters because all of our metals at the bottom of some lake and are not affected.  We are horrible boaters.

Thu, 02/07/2013 - 23:36 | 3225047 Non Passaran
Non Passaran's picture

You mean the old saying from Tennessee?

I can't decide what seems cheaper now... Been buying gold more than silver, but last year I added silver at 33 and a bit at 27. It's all good, a few percent more or less won't make a difference in the scenario we are prepping for

Fri, 02/08/2013 - 01:12 | 3225212 Lordflin
Lordflin's picture

The world is filled with paramecium... Reload the margin cannon and watch the suckers stand in line to get their heads blown off...

On the other hand, premium is on the rise... Maybe we get lucky this go around and the damn thing is spiked.

Thu, 02/07/2013 - 22:06 | 3224858 The Fonz...befo...
The Fonz...before shark jump's picture

G?nxiè nín gèng piányi de j?n, yín

That's mandarin for thank you for cheaper gold silver prices

Thu, 02/07/2013 - 22:16 | 3224876 LongSoupLine
LongSoupLine's picture

CME - Criminal Muppet Eaters.


Fucking pricks, fuck off.

Tue, 02/12/2013 - 23:15 | 3239257 MeelionDollerBogus
MeelionDollerBogus's picture

When soylent muppet is what’s swimming in the shark pool …

Thu, 02/07/2013 - 23:22 | 3225015 SaveTheBales
SaveTheBales's picture

I would guess most people here have a core holding of gold and trade around it.  Emotionalism is a sign of over-allocation, under-hedging or both.  I hope the damn Eagles go to face value.  I'll toss them from cruise ships at the politicians, and watch them grovel on the pier.

A gander at a long-term chart for the metals suggests to me that being high-strung over their short-term price behavior is irrational.  Its just one more piece of insurance that folks use in case of Total Fucking Collapse.  That's not as unthinkable as it used to be, so gold catches a bid.  Go figure.

See?  Not everyone in ZH is a pajama-clad gold bug hiding in a bunker waiting for Nibiru.  Lighten up, Frances. 


Fri, 02/08/2013 - 01:26 | 3225226 jballz
jballz's picture


you are all pathologically fucking paranoid. And you have no idea how markets work if you believe a 15% margin hike was designed to crush a rally. This is the biggest, dumbest, total piece of fiction out there and every time zerohedge posts it I believe them to be seriously fucking retarded. 

If you were the guarantor of a silver spec- assuming you had any money- how much margin would YOU make some random schmuck in another time zone or country put up to back the trade?

It's not a conspiracy or a manipulation. You are a dumb asshole.

Thu, 02/07/2013 - 19:43 | 3224532 AldoHux_IV
AldoHux_IV's picture

Not to mention that if this leads to higher paper prices it acts as another tax upon the concerned citizenry of these United States of America.

Fuck the manipulated markets and charade.

Thu, 02/07/2013 - 19:44 | 3224535 Racer
Racer's picture

Yes, they have been finding it very difficult to keep the prices down so now need more suckers to do it for them

Thu, 02/07/2013 - 19:49 | 3224542 Cheesy Bastard
Cheesy Bastard's picture

Deflation will come.  The opportunity to buy commodities will come.  Be in cash.  Stocks will crash and when they retrace 666 you should buy silver.  It will be your last chance.

Thu, 02/07/2013 - 19:51 | 3224554 Whalley World
Whalley World's picture

Deflation is gold positive, have you looked at the gold price during the last depression?

Thu, 02/07/2013 - 19:53 | 3224559 nope-1004
nope-1004's picture


Thu, 02/07/2013 - 20:33 | 3224653 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Riddle me this!

Which "asset" bottomed first in the Crash of '08 - '09??

Gold, or equity???

Do you have an answer?

If not, you should go look at some charts right now!

[Looks at watch....]


Did you not go?  Still waiting for an answer??

Gold bottomed first!  Muahahahaha!

Thu, 02/07/2013 - 21:28 | 3224777 Cheesy Bastard
Cheesy Bastard's picture

Riddle me this my good man.  Why did gold go from a thousand bucks to $700 that year?  eh? Did it follow the market down?

Thu, 02/07/2013 - 21:52 | 3224829 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

No, it lead the market down, because the market follows gold.

And a 30% correction when the Dow ass fucked everyone by getting cut by more than half is fine, especially when it started ramping up in the fall when equity bottomed in the spring.

Gold wins, you lose.

Thu, 02/07/2013 - 22:03 | 3224853 Cheesy Bastard
Cheesy Bastard's picture

Really?  In 2008 gold went from $900 to $900.  The Dow went from 12000 to 8000.  Math wins.   You lose.

Thu, 02/07/2013 - 22:59 | 3224950 RockyRacoon
RockyRacoon's picture

It's not important what went down when.  The important part is WHY.

If gold is indeed a store of value, then that value was tapped in the crisis.  Just as it should have.

Gold displayed the perfect example of why we hold it.  To get on the other side of the crisis intact.

Thu, 02/07/2013 - 23:03 | 3224966 Cheesy Bastard
Cheesy Bastard's picture

Astute observation, and correct assessment.

Thu, 02/07/2013 - 20:00 | 3224578 seek
seek's picture

The price of gold in the last depression was a jail sentence. That speaks volumes about its (positive) value.

Thu, 02/07/2013 - 20:20 | 3224620 Harbanger
Harbanger's picture

Even during the last depression, you still would have been way better off than the guy with his money in the Markets who lost eveything.  This time it's not just the stock markets, but the actual money in your bank or under the mattress.  You want to be long fiat?  Good luck.

Thu, 02/07/2013 - 20:45 | 3224673 Kaiser Sousa
Kaiser Sousa's picture

"The price of gold in the last depression was a jail sentence. That speaks volumes about its (positive) value."


spoken like a truly obedient debt slave...

so scared of "the man" and all his oppressive powers...

go ahead...keep collecting debt coupon dollars or saving whats left of their value since 1914 (uh, what thats - 2%) in the other banker controlled investment vehicles yeilding NOTHING and worth NOTHING adjusted for REAL inflation and TAXES...

sounds like a winning hand - man....

Thu, 02/07/2013 - 20:58 | 3224718 seek
seek's picture

Uh, I think you missed the point. I'm a huge gold bug as anyone who's read my postings will know.

Gold was the one things of value that preserved wealth, hence it was made illegal. As I said, this speaks volumes about its positive value.

Thu, 02/07/2013 - 21:15 | 3224752 Kaiser Sousa
Kaiser Sousa's picture

My bad...missed the sarcasm designation....

Fri, 02/08/2013 - 01:04 | 3225201 trav777
trav777's picture

only if you're fuckin stupid.

The penalties were for hoarding gold and specifically coinage, bullion, money.

Not jewelry.  The modern age makes a smelter within reach of nearly everybody.

I bet you people didn't know that I am highly religious.  I intend to show that with either a calf made of gold or a gigantic cross.  Neither of these religious symbols can be seized or would violate any of these provisions. 

You people with your bullion are the real doomers.  Us religious people are praying for your our solid gold calves.

Fri, 02/08/2013 - 09:54 | 3225561 smiler03
smiler03's picture

Ha Ha, I almost thought this was Bob Dalina

Fri, 02/08/2013 - 10:28 | 3225653 Room 101
Room 101's picture

+1.'re an asshole.  But an asshole I've come to appreciate from time to time.  Excellent post.

Fri, 02/08/2013 - 10:35 | 3225668 otto skorzeny
otto skorzeny's picture

you think the govt in a SHTF situation is going to go for that bullshit- it's like if they ban assault rifles and I tie a stick onto my AK to form a cross and say that it's a religous icon that they are going to let it slide?

Fri, 02/08/2013 - 05:38 | 3225333 r3phl0x
r3phl0x's picture

Deflation might come, but it will be minor and brief, given the # of Central Bank money printers in the asset price control loop. I doubt 2013 will turn out like 2008.

Thu, 02/07/2013 - 19:47 | 3224545 Bastiat
Bastiat's picture

CME can go fuck itself. 

Thu, 02/07/2013 - 21:57 | 3224841 tenpanhandle
tenpanhandle's picture

fuck, fuck, fuck, fuck, fuck.  Okay already.  Why these brainless epithets get any response at all is starting to bother me.  All you people who upvote them so prolifically should go watch Southpark.  Maybe you can see Cartman take a big crap or something. Upvote that.

Thu, 02/07/2013 - 22:52 | 3224939 Mr Pink
Mr Pink's picture

Tenpan is mad because Cartman called him a fucking faggot for revving up his fucking faggy ass Harley. Fucking fag

Thu, 02/07/2013 - 23:31 | 3225035 francis_sawyer
francis_sawyer's picture

Shit. Fuck. Buggety Bugger................ & tits.

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