CME Hikes Gold Margins By 25%

Tyler Durden's picture

How very unexpected. And how, judging by today's massive selloff, it is almost as if someone knew in advance this would happen. Can JPMorgan just restock its vault with whatever gold it needs to meet its massive delivery demands (at three year low prices) so some normalcy can return to the market?

Source: CME

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Shell Game's picture

...and fuck you Greenspan, Volker, Paulson, Geithner, Dimon, Blankfein, Blythe, Kagan, Sotomayor, Alito, Roberts, Ginsberg, Thomas, Scalia, Napolitano, Alexander, Brennan, Obama, NWO Bush, Patriot Act Bush, Boehner, Feinstein, McCain, Pelosi, Reid, etc.....mother fucking..etc..   Fuck you all.

ZerOhead's picture

Fuck them? Impossible... they are running 'the show'...

NSA Whistleblower: NSA Spying On – and Blackmailing – Top Government Officials and Military Officers


NSA whistleblower Russel Tice told Peter B. Collins on Boiling Frog Post News (the website of high-level FBI whistleblower Sibel Edmonds):

Tice: Okay. They went after–and I know this because I had my hands literally on the paperwork for these sort of things–they went after high-ranking military officers; they went after members of Congress, both Senate and the House, especially on the intelligence committees and on the armed services committees and some of the–and judicial. But they went after other ones, too. They went after lawyers and law firms. All kinds of–heaps of lawyers and law firms. They went after judges. One of the judges is now sitting on the Supreme Court that I had his wiretap information in my hand. Two are former FISA court judges. They went after State Department officials. They went after people in the executive service that were part of the White House–their own people.


nope-1004's picture

HaHa!!!  Proof that the COMEX is a fraud with no gold.  White collar criminals draining the GLD.

AllThatGlitters's picture

This is to limit further hedge fund shorting and to actually induce a short-squeeze, since the bullion banks were buying all day today, right?



OutLookingIn's picture

Remember that the margin credit debt on stocks was near an all time high.

Watch the fun unfold as the scramble to cover has begun.

Everything thats not nailed down is being sold to meet their margin calls.

Lots of nothing but air under the market now. lol

AllThatGlitters's picture

Well, Globex is open, and so far, gold is just yawning:

Perhaps gold would have actually traded up today, but the insiders knew this was coming.

Heck, I don't know. Somebody explain it to me in a way that a 2nd grader could understand it.

SAT 800's picture

I think your remark is as good as anyones. All I can do is remind everyone that for every shrot contract there's a long; and also I can observe that the open interest, which is the total number of contracts that exist; if the open interest is reported at 121,000; that means there's 60,500 long and 60,500 short; has been decreasing steadily during this downwash in gold and silver prices, and the curve of the decline in open interest pretty much matches the shape of the declining price, on the daily price chart. What this means is that Long's are liquidating; rather than new shorts are being created; so basically the downwash is a hapening featuring people closing out long contracts. Why the Exchange would want to raise the margin in a situation like this, I don't know. It's not intuitively understandable to me. Everyone understands that raising the margin will cause more liquidations and a lower open interest; but they already have this going on. Typically, or in the past, we have seen them raise the margin when the open interest was quite high and rising quickly; and in that case you can make a reasonable argument as to why they did it; they felt that the market needed to calm down, or they might have trouble matching up trades and having the thing run smoothly; but why they did it now, I don't know. I decided not to be involved in any of this trading over a month ago; I don't understand it; so I'm not going to get into to it. Today I just bought the long Bond Contract @136.07; because it seems too cheap; I think it's over done and it'll probably rally; the silver price is very attractive; but I'm still sitting out the dance; I don't know what's going on.

MisterMousePotato's picture

"I don't know what's going on."

A bit presumptive, I know, but I think you speak for all of us.

One World Mafia's picture

If the open interest is reported at 121,000 there are 121,000 long and 121,000 short.

If an investor bought one call contract from an option writer, the investor is long one contract, the writer is short one.

Al Gorerhythm's picture

Your statement that "for evrry short, there's a long." is somehow used as the basis for legitimising an argument. There may be a short for every long but not all of the shorts are covered. Just like a bank loan, there is no intention of supplying any "consideration" into the agreement. In other words, the banks and shorts don't have any skin in the game. They're naked for a start and can claim force majeure as the ultimate get out of jail card. 

Al Gorerhythm's picture

The fact that the open interest is falling does not mean that honest longs are buying the shorts, thereby cancelling out the contract. The dishonest shorts are buying back their own short contracts that they used to monkey-hammer the price down with. The get to print their false tickets and buy them back at profit. Any honest long playing with margin in these markets is a junkie on the path to "financial" oblivion. Traded it, got hammered like this in '08, got out bloodied but wiser.

SRSrocco's picture

This is the same kind of GARBAGE that the Central Banks and IMF were doing in THE GREAT GOLD CRASH OF 1975.  I highly recommend this article.  It details all the gold selling by Central Banks.  However, today they are selling PAPER:

MUST READ: Sunday Gold Fix – The Gold Crash ’75


Pegasus Muse's picture

"Can JPMorgan just restock its vault with whatever gold it needs to meet its massive delivery demands (at three year low prices) so some normalcy can return to the market?"

Unfortunately "normal" for the COMEX is a state of perpetual corruption.  

Vint Slugs's picture

You saw this, right? Written over a year ago.


Btw, there was no gold "crash" in 1975.  Because you tout it, I see you have a blog.  BFD.  Why don't you do a little homework and get some perspective.  The US gold futures market started trading at the end of 1974.  Typical with a new futures market, the specs over-priced the commodity and the trade sold it to them.  The mkt sold off for over nearly 2 years - hardly a crash.

anonum's picture

Food for thought from your link; "It is dangerous to write off the gold bull... In the 1970's, economists rewrote the global monetary order and chaos resulted.  But at least they had their gold crash for a temporary reprieve." 

Shell Game's picture



Judge Napolitano on Snowden:

"One of the spies who knew the power he and his fellow spies had and who had access to the innermost thoughts of hundreds of millions of us – and who disbelieved the president – was Edward Snowden. Snowden realized the unconstitutional nature of what the government was doing and concluded that he could not be faithful to both of his oaths. One of those oaths – to retain secrets – is grounded in a federal statute that requires secrecy and punishes the exposure of secrets. The other oath is grounded in the Constitution, which is the supreme law of the land and protects the natural right to be left alone and does not punish the governmental violation of that right.

When confronted with the conflicting oaths, Snowden opted for the higher good: fidelity to the supreme law of the land. Hence, in order to protect the privacy of us all, Snowden violated the lesser oath and upheld the greater one. He could not serve two masters when the lesser of the two (fidelity to the government's laws) facilitated a corruption of the greater of the two (the primacy to the Constitution).

He's a traitor, the establishment roared. He's a high school dropout. He left the Army. He admits to having lots of sex with his girlfriend. He fled to Hong Kong.

Who cares?

He understands, as Ronald Reagan did, that if we don't control the government, the government will control us. That's why the Washington establishment yawned when we learned what it knew and now roars because Snowden challenged it. Those in power want to stay there and will misuse the Constitution to do so for as long as they can get away with it, no matter to which political party they belong. Any government that secretly spies on nearly all the population is aiming to control the population.

Snowden knew that this massive violation of the constitutionally guaranteed rights of nearly every American, orchestrated and operated in secrecy, is corrupting the Constitution and empowering the corruptors. It was that understanding plus a willingness to face down those in power who lack fidelity to the Constitution and who can do him harm that constituted the behavior of a hero.

Is he flawed?

The only hero who was not flawed was nailed to a tree 2,000 years ago because those He came into the world to save rejected Him."


Impossible?  I'd say PROBABLE.

lakecity55's picture

The 21st century image of a man standing in front of a tank in China is a man standing in front of the NSA.

Flagit's picture

ever see an engine block launch that far?

Henry Hub's picture

I would really like to see the tape of Linsey Graham romping and frolicking with all those naked young boys or what ever they have on him. It must be pretty serious stuff.

SWCroaker's picture

No.  Maybe hear about them, or better yet, hear *of* them, but not see them.      Ick.

Go Tribe's picture

Or receipts for lavender bathrooms delivered by him to all those under-age boys.

q99x2's picture

Long live the revolution.

BigJim's picture

The JPM, the!

I wonder if Bernanke speaks German? 

Manthong's picture

Just remember. In the paper market, premiums don’t matter if you get your money for free from the guy who prints it.

Have fun “trading” against that.

nope-1004's picture

<-- GLD to be drained, reviving COMEX inventory for delivery

<-- COMEX futures holders will pitch their contracts.


Place yer bets.

NOTE:  The word reviving is used loosely, as a doctor can technically revive a squirrel that has been run over by a steam roller - to some degree.


Al Huxley's picture

Bullion banks will add up their net exposure, and surprise surprise, find that, although they're short the physical required to deliver against their obligations, they are actually net long.  So they'll just politely transfer the delivery requirements over to the specs who are net short, and let them be the ones who default. 

sampo's picture

No. What if they're just buying it all from the open market with moar debt?

Yeah, I know..

kito's picture

What if bullion banks are bleeding gold because everybody is selling and no longer needed storage??? Just a thought...

Edit: how could one tell if the drain comes from dumping physical or from more demanding it? Doesn't jpm store for others as opposed to being completely proprietary?

Al Huxley's picture

You can see the position summaries in the Comex inventory and weekly COT reports.  But yes, those could be either misleading or misinterpreted, so yes, as I wrote in a post yesterday, one possible scenario is

- JPM and the other BBs are actually position neutral like they say, the entire gold market is entirely above board, and the 400 ton overnight sell-off back in April, generating the crash in the Comex price of gold contrary to the vertically increasing money supply, bail-ins in Cyprus, record demand in China and India, inability to scare up enough gold to return to Germany, ABN settling in cash, ....  is all just normal market function.  So, although they and/or the industry have been implicated in numerous cases of market manipulation to their own benefit since at least 2008, in the case of the precious metals markets, which are illiquid, easily manipulated and highly political, in these markets their hands are completely clean and they operate with only the highest scruples.


You think that's a likely scenario?

SAT 800's picture

The process of closing a short position consists of making a buy; it's a buy order that cancells a short position and takes you out of the market, or "square" as they say. So the short never has a problem. To imagine that a short futures trader has to "deliver" something is just to prove that you don';t understand futures trading.

kito's picture

That wasn't my question is how can you differentiate isgust vs. demand for gold bullion merely by accounting for what is in the vault. I don't see how one can..whats your beef with me my thoughts represent a chink in your armour or world I bring your latent.vulnerabilities to the surface...

Oh wait you weren't talking to me......

Al Huxley's picture

If you've sold somebody a futures contract, and they demand delivery, you have to deliver (subject to all the Comex rules that allow cash settlement).  Either you have the inventory (covered) or you have to get it.   This may not be the norm, since most contracts get rolled or closed out prior to delivery, but the underlying fundamental of futures markets (and options markets) is based on that original premise.  It's also why the bullion banks maintain inventory.  You think, for example, if I sold calls on Google and on expiry date the buyer of those calls was in the money that I wouldn't be on the hook for the shares?  

neidermeyer's picture

My dear Mr. Huxley , That scenario is positively lacking in scruples ,, they would never assign the dirty to someone else... just like they would never wait til the close of business to decide which trades were for their institutional clients and which trades go in their "win" pile..

RockyRacoon's picture

NOTE:  The word reviving is used loosely, as a doctor can technically revive a squirrel that has been run over by a steam roller - to some degree.

Kinda like "reviving" those frog legs with electrodes in high school science classes.  Add enough QE and any dead market will revive the same way.  Just death throes.

resurger's picture

A rout in gold ... bullshit!

Ratscam's picture

you sound like 2 Pac song "hit them up"

Lets_Eat_Ben's picture

woah woah woah wait a minute now...what about Poppy?

thorgodofthunder's picture


Lololololololol. Fools

Bay of Pigs's picture

You missing the bigger picture you stupid fucking palooka?

kito's picture

Bay help me out....because I'm missing this picture.....I'm seeing the fire drill today for my scenario where everything that is bought with dollars gets obliterated....except the dollar itself....if today was a gun shot...the real thing will be thermonuclear...

Bay of Pigs's picture

Gold is money kito, and nobody elses counterparty risk is tied to it. The USD is going to burn too....just a matter of when (becasue of crushing debt).

Many countries (BRICS) are moving away from the USD. That is a fact. Gold is solid hedge. Not trying to sell you a bad paper asset or shitty mining stock. 


FranSix's picture

Friday options expire, quarterly at the end of next week, and precious metals on Tuesday:

chdwlch1's picture

And right before Gold options expiry quaint/criminal.

CPL's picture

So what?


Paper ETF's being traded for paper FRN's.  I don't see how this takes PM's from my hands.


nope-1004's picture

No, paper ETF's being redeemed for GLD gold to restock the COMEX, or so the theory goes.  Of course, JPM runs both, so these could be just paper entries to keep the bank alive another month.


unwashedmass's picture


well, if you follow Harvey Organ...he tracks the inventories of GLD and SLV.....and he thinks SLV was drained dry months ago. Only this past week is he saying that GLD is nothing more than a pile of paper. Its amazine. blatant this all is now.