CME Hikes Gold, Silver Margins By 18.5%

Tyler Durden's picture




 

Anyone surprised, please raise your hands. And yes, it was fun when margin were hiked only on surges in the various futures contracts. Now, dumps works just as well. The logic, of course, is that gold shorts are also margined. However, judging by the immediate $15 drop in gold upon the announcement, those who are short the metals certainly have a much, much bigger balance sheet and cash hoard to satisfy any collateral requirements than those long. Next: expect the Shanghai Gold Exchange to hike margins in a few short hours once China wakes up and looks at overnight PM prices in horror.

Source: CME

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Mon, 04/15/2013 - 18:34 | 3453388 Temporis
Temporis's picture

Still have my stack.

Hope silver drops to $5 so I can get a whole lot more.

The more they drop it, the more I can buy.

Mon, 04/15/2013 - 18:35 | 3453412 Croesus
Croesus's picture

Yeah, we knew that was coming.....but I don't think the Chinese will look at the prices in horror....they'll probably BTFD.

Mon, 04/15/2013 - 18:38 | 3453452 Melin
Melin's picture

exactly.  I always wonder why people assume the Chinese dislike cheap PMs.

Mon, 04/15/2013 - 18:59 | 3453551 Temporis
Temporis's picture

OMG Kitco is selling silver Eagles / Maples ONLY OUTSIDE THE US.

WTF!??!

https://online.kitco.com/bullion/completelist_USD.html

Mon, 04/15/2013 - 19:12 | 3453624 dryam
dryam's picture

Can anyone shed some light on this most curious fact?

Mon, 04/15/2013 - 19:15 | 3453636 Frank N. Beans
Frank N. Beans's picture

weird

Mon, 04/15/2013 - 19:54 | 3453806 markmotive
markmotive's picture

The end might be near...

John Taylor: Gold is Close to a Buying Opportunity

http://www.planbeconomics.com/2013/04/gold-close-to-buying-opportunity-j...

 

Mon, 04/15/2013 - 20:42 | 3454040 Manthong
Manthong's picture

Kind of ballsy..

A high margin for a bet on nothing.

Mon, 04/15/2013 - 19:15 | 3453638 tallen
tallen's picture

I actually think it's bullish this time. Seen as though any long with excessive-leverage has probably been stopped out by now, it's the shorts this time that are under-pressure with vol in silver/gold right now. 

Tue, 04/16/2013 - 06:48 | 3455382 Winston Churchill
Winston Churchill's picture

Kitco delivers thru' their subsid. in new England.They deliver to them in bulk.

Means that susid. is out of stock, and cannot resupply at the moment.

TPTB badly misjudged the response on this takedown.Trouble is they truly

believe they are obermensch.They are not infallible at all,far from it.

Mon, 04/15/2013 - 19:56 | 3453813 jonjon831983
jonjon831983's picture

Interesting.

 

lol... because they don't want any more USD?

Mon, 04/15/2013 - 20:27 | 3453974 Buck Johnson
Buck Johnson's picture

That is weird, something is on the way and it's extremely ugly.

Tue, 04/16/2013 - 03:20 | 3455232 torak
torak's picture

Sweet Jesus.  We can't allow the muppets to buy the dips (takedowns) on margin.  That's only for the .01%ers to do.

Mon, 04/15/2013 - 19:01 | 3453584 Croesus
Croesus's picture

@ Pinto Currency:

Your post on Maguire ties right in with Bill Holter's comments:

http://blog.milesfranklin.com/force-majeure-was-the-end-game-all-along

 

 

Mon, 04/15/2013 - 19:08 | 3453610 Pinto Currency
Pinto Currency's picture

Croes

Did not see.

Comex makes no promise in their rules of physical delivery.

LBMA would be incredible but I think inevitable.

Mon, 04/15/2013 - 19:30 | 3453709 Croesus
Croesus's picture

@ Pinto Currency:

I think it's (the default scenario) probably true. There are too many manipulations happening, and the frequency is increasing. That Gold VIX chart from earlier was very interesting, in that it implied a major event has occured, and the markets haven't learned of it yet, let alone had a chance to digest it.

After the Boston Marathon bombing happened, any type of financial news automatically became less-important. Not to go all "conspiracy theory", but I have to wonder what our attentions are being diverted away from?

Too many coincidences happened today.

Mon, 04/15/2013 - 21:04 | 3454158 Pinto Currency
Pinto Currency's picture

Keep in mind, the threat of the LBMA default is to the fractional reserve fiat money system.

Solutions abound, but will not be pursued by Obama and those who finance him.

At some point, this will reach a point where it can't be avoided any more - it will be interesting to see if Obama et al are successful in using force to set the direction forward or whether they will be forced to develop a productive solution.

Mon, 04/15/2013 - 19:02 | 3453542 WhiteNight123129
WhiteNight123129's picture

HERE IS WHY GOLD HAS TO GO LOWER: JAPAN

The Gold price has risen in Japan even before the attempt to debase the currency. If Gold were to spike in Yen terms, it would have triggered a panic buying of Gold in Japan and central banks do not want that.

Gold is the only asset which is purchased in panic as we all know here.

SO: WE SHOULD HAVE FIGURED THIS OUT!! I THINK SOROS AND GARTMAN AND OTHERS WERE FIGURING THIS OUT. There is no meltdown is soft commodities as we speak (gold and Soft commodities always are joined at the hip, since the consumption does not depend on government policies unlike industrial commodities consumption leveraged by Chinese SOEs).

This move is just to avoid a disorderly price of Gold coming from the Japanese public.

 

JAPAN POTENTIAL PANIC BUYING WOULD BE WHY MCGUIRE TALKS ABOUT A DEFAULT, THE YEN FALL WOULD PROBABLY HAVE TRIGGERED THE BEGINNING OF PANIC BUYING IN JAPAN.

 

Mon, 04/15/2013 - 19:15 | 3453635 augustusgloop
augustusgloop's picture

Soros figuring it out? Soros has figured it out. If you are a very smart mother fucker who has faced the abyss vis a vis nazi regime as it engulfed Hungary, you figure it out early. 

 

Soros always has Janus headed comments-- "gold is the ultimate bubble" - parse that. this after gold goes over 1K on first bout of QE.  Not gold is in a bubble... Gold is the bubble after all other bubbles have been inflated / popped... 

 

As well his recent comments about gold not holding up as a safe haven...but will hold up on central bank buying.

Mon, 04/15/2013 - 19:15 | 3453642 boogerbently
boogerbently's picture

Tell me when JPM and team quit shorting.

Mon, 04/15/2013 - 20:15 | 3453911 WhiteNight123129
WhiteNight123129's picture

Also remember that Gold had reached its very old 1980 ALL TIME HIGH in yen only a few weeks ago.

What typically goes on when an old all time high is breached? IT GOES OFF THE RACES!!!

Now what would have happend to flow of yen, it would not have gone to treasuries!!!

ALSO:

Since Gold shapes inflation expectations and since Japan is where there is the most risk of hyperinflation, this coordinated move on Gold was absolutely crucial to make sure that this risk of hyperinflation is pushed away.

Now I guess Kyle Bass who was wondering why the Gold is low has his answer...

 

Mon, 04/15/2013 - 19:18 | 3453656 johnnymustardseed
johnnymustardseed's picture

This beat down begs the question: What do they know that make them so scared that they need to push the price so low?

Mon, 04/15/2013 - 19:54 | 3453808 seek
seek's picture

All the indications are the economy suffered a 2008-level implosion starting around Oct/Nov 2012, and the reality of that is starting to appear. Mix in Cyprus and widespread distrust of governments, both by citizens and other governments, and you have a witches' brew for deflation and bank runs before the hyperinflation hits. They have access to unadulterated statistics and see the writing on the wall.

Standing for gold delivery is the visible symptom of mistrust, and they're trying to disrupt it before the lie is exposed, and it's not working.

Mon, 04/15/2013 - 20:37 | 3454007 kaiserhoff
kaiserhoff's picture

Yes, a six month lag.  Fools won't believe it until they see the stats.

I've never understood how the traders in Chicagah couldn't react to floods or drought until they saw the ag dept reports, even when they had the same damn weather as the corn belt. 

Mush for brains..., quite profitable, though;)

Mon, 04/15/2013 - 20:16 | 3453915 WhiteNight123129
WhiteNight123129's picture

It is Japan which was the scare. See my comments above.

Mon, 04/15/2013 - 18:42 | 3453471 kaiserhoff
kaiserhoff's picture

There goes the neighborhood.

  As if thousands of people didn't have their faces ripped off in the last two sessions.

  Flat never felt so good.

Mon, 04/15/2013 - 19:27 | 3453690 rocker
rocker's picture

One needs to wonder if the Stock Market is next. The action looked bad on all fronts. If the economy was growing platinum would have at least parted ways from gold. Since it has not I don't like any assets except for cash. 

Mon, 04/15/2013 - 18:51 | 3453526 DogOfSinope
DogOfSinope's picture

They can finally convert truckloads of US treasuries for something of actual value.

Mon, 04/15/2013 - 19:17 | 3453600 BigJim
BigJim's picture

 ... "Next: expect the Shanghai Gold Exchange to hike margins in a few short hours once China wakes up and looks at overnight PM prices in horror."

What? You think anyone holding PMs over there managed to sleep? 

Mon, 04/15/2013 - 18:35 | 3453418 Temporis
Temporis's picture

My coin guy is now selling silver eagles $6 over spot.... wow...

Mon, 04/15/2013 - 18:38 | 3453434 devo
devo's picture

I see that everywhere, but once they sell of their current stock (which they bought high so they have to jack up the premium), the new inventory will probably have much less premium. Right?

Mon, 04/15/2013 - 18:57 | 3453552 seek
seek's picture

New inventory... LOL.

The blank makers have to get their metal from somewhere, and it's not going to come from good delivery bars bought on the futures exchanges, so that leaves the miners. I don't think the miners are going to be super excited about production at low prices and will scale back. Physical supply is going to get tighter, ergo premiums higher.

Of course if the LBMA default rumors are true, AU will go to the stratosphere shortly, and premiums will be the last thing to worry about.

Mon, 04/15/2013 - 19:02 | 3453588 devo
devo's picture

Miners are still turning a profit, albiet narrower, so as long as they are doing that they'll produce.

I do think physical supply will get tigher, but not so tight dealers can't get any. There are also panic sellers who are giving their silver to apmex et al for 18 or so right now.

We'll see. I expect lower premiums in a few weeks if the price sticks here.

Mon, 04/15/2013 - 22:58 | 3454813 Panafrican Funk...
Panafrican Funktron Robot's picture

People who hold physical silver don't tend to "panic sell" to anyone.  Kind of defeats the purpose, eh?

Tue, 04/16/2013 - 00:40 | 3455067 fourchan
fourchan's picture

we laugh at the gyrations of paper and its enevitable end.

Mon, 04/15/2013 - 19:06 | 3453605 dogbreath
dogbreath's picture

If I was a dealer I would pretend to be sold out too

Mon, 04/15/2013 - 18:47 | 3453507 Georgiabelle
Georgiabelle's picture

Mine too, but he only had about 30 of them left. And other than a few 100 oz bars, he was completely out of all other stock. He has orders in process but said he doubts they will be filled. None of his sources have any physical available. 

Mon, 04/15/2013 - 19:58 | 3453827 jomama
jomama's picture

my guy is up to $4.95 over spot (when he's normally $2.95), and had a bleak look on his face when i said i wanted 100 of them...

Mon, 04/15/2013 - 21:48 | 3454453 Papasmurf
Papasmurf's picture

LCS here did a brisk business today even with high premiums. Folks were lined up with a thirty minute wait.  Most were buying except for one guy selling sofa leftovers to buy a pizza.  Inventory was thin but fresh allocated goods were arriving with more arriving daily.  Folks who weren't particular about scratches or newness could find something to own.  Interestingly, most in the store were Indian or Asians.  I think they understand money better than American born.

Mon, 04/15/2013 - 18:39 | 3453442 LynRobison
LynRobison's picture

Me too, but Apmex seems to be running out of Silver Eagles.

It's weird, when you suppress the price, you get scarcity. I would love see scarcity to the point that the Comex defaults.

Mon, 04/15/2013 - 18:43 | 3453489 LetThemEatRand
LetThemEatRand's picture

That's when they criminalize ownership.

Mon, 04/15/2013 - 18:48 | 3453504 TheCanadianAustrian
TheCanadianAustrian's picture

People were saying the same thing when Silver went down to $30 about a year and a half ago. "There's no supply at APMEX, they'll refuse to sell at that price."

Turned out not to be true. And if there is any supply shortage due to the low prices, it will be short lived.

The fact is that prices are low because institutional investors are willing to let go of their metals right now. I wish people would stop reading more into it than that.

Mon, 04/15/2013 - 18:58 | 3453543 LynRobison
LynRobison's picture

Umm, "any scarcity due to low prices will be short-lived"? How does that work? If the price of Hershey bars were artificially suppressed and held to 25 cents, the scarcity of Hershey bars would not be short-lived -- it would last as along as the price is suppressed. 

Also, your notion that "prices are low because institutional investors are willing to let go of their metals right now" is false. They are letting go of paper, not metal. 

Welcome to reality. 

Mon, 04/15/2013 - 19:04 | 3453596 Bay of Pigs
Bay of Pigs's picture

All reports are that physical demand is off the hook and very strong. Tulving is burning through his silver inventory rapidly. Almost all of it is gone.

Mon, 04/15/2013 - 20:00 | 3453845 mjk0259
mjk0259's picture

..and since no one has been unable to buy silver or gold in as large a quantity as they want , it follows by your reasoning that the prices are not suppressed to artificially low levels

Mon, 04/15/2013 - 22:27 | 3454656 LynRobison
LynRobison's picture

"No one has been unable to buy silver or gold in as large a quantity as they want"?!? Have you seen Apmex today? Try buying yourself a couple hundred 2012 or 2013 silver eagles. You won't be able to get them. So, what are you talking about?

Mon, 04/15/2013 - 19:47 | 3453778 Mine Is Bigger
Mine Is Bigger's picture

I think APMEX just raised premiums in the past 30 minutes or so.  (It's 7:45 p.m. EST now).

Mon, 04/15/2013 - 19:02 | 3453576 sotto
sotto's picture

Yeah, me too.  Btw, here's Peter Schiff on the whole gold and silver pullback:  http://globalgoldnews.com/2013/04/15/peter-schiff-this-is-the-last-great...

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