Copper Set To Tumble After CME Hikes Copper, Platinum Margins Once Again

Tyler Durden's picture

It appears the US has decided to apply a scorched earth policy to China. While we are seeing flashing headlines that the Senate just passed a China currency bill 79 to 19 (we don't know what is in the bill yet), we doubt it will be something that China will be too pleased with, as most likely there will be some language about currency manipulation and/or some such typical politician propaganda. What is more troubling is that the CME just made sure the tens if not hundreds of billions of Chinese copper collateralized Letters of Credit just lost even more value following yet another margin hike in Copper, which raised initial and maintenance margins by 15%. If China perceives US actions as provocative (and it made very clear that US overtures in Taiwan already are), we may just see an 'oopsie' moment tomorrow when the Mainland decides to offload a few billions in US Treasurys. And the cherry on top was a 28.6% margin hike in Platinum: a direct warning to gold and silver longs once again.


Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
dick cheneys ghost's picture

pass the sweet and sour shrimp.............

Mike2756's picture

Wow, they're gluttons for punishment.

Comay Mierda's picture

time to buy more some SLV & GLD puts

jekyll island's picture

Hike the Gold and Silver margins to 100%, let's get this over with.  

Thomas's picture

Yup. We don't need no stinking speculators!

JohnG's picture

Ahem, already on.  Get em while you can.  Seems to be coming apart.

It's on.

traderjoe's picture

Imho platinum is a bargain here.

WestVillageIdiot's picture

Nobody can say these markets aren't interesting.  I'm really at a "what is going on?" moment.  I have no idea where anything is headed, including PMs.  I had bought a lot in the last 5 years and now I figure I am just going to sit on it (not literally).  I'm trying to keep a good supply of that crap called "cash".  Maybe there will be some buying opportunities in 6 months or so. 

I think long-term accumulation of PMs is good but I can see it going down quite a bit from here.  I had not had that type of thought for a while.  It is probably wrong.  The reason I see for a further hit to PMs is that somebody is trying to seriously monkey-fukk China.  Just look at the Chinese stock market.  It is getting destroyed.  Now commodities are getting taken out and shot. 

Just think if oil gets below $70, even to $60.  Then we can start talking about big problems in Australia and Canada.  Don't they still have those unpopped housing bubbles?  Good luck with that,  Your denial will turn to anger and fear.  I have seen that in the people around me.  Enjoy.  Just make sure you keep saying, "prices will come back".  If you say it enough it might come true.  Well, not really, but you can think that. 

Mike2756's picture

Went long silver, got stopped out and went short via zsl. Looks like it's headed to 20.

SGS's picture

Maybe, homie they were saying the same at $450/share ZSL not too long ago.

Mike2756's picture

Daily is oversold but, weak bounce in the stoch and rsi. Weekly not there yet but, the macd is hooking lower, daily might be working off oversold time vs. price. 4hr 40ma coming in around 30.69, got a bounce off the 100ma on the weekly, 200 is coming in at 20.53. Didn't put on a huge position, just looked good from the short side.

Motley Fool's picture

There is a war going on my friend. Seen American stocks lately?

chump666's picture

Australia and Canada will be shorted hard.  Their main markets are made up of miners/financial/real estate

Pegasus Muse's picture

When the CRIMEX/CME/CFTC futures/options manipulators of commodities play their games to smash the prices of real stuff in order to prop up their Ponzi Paper Products .... well the buyers of Physical Commods step up to the plate and say, "I'll take some that.  Thanks for the discount". 

Qatari wealth fund plans $10bn gold buying spree

The Qatari Royal family plans to spend up to $10bn (£6.4bn) buying stakes in gold producers through their sovereign wealth fund, The Daily Telegraph can disclose. 

Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Why would the dumb fucks announce this!  Accumulate in secrecy otherwise risk driving up the price of that which you wish to purchase.  Dumb fucks or what?!

Yen Cross's picture

That was accurate. Get ready for real money moves

Prometheus418's picture

Had the same moment a lot of times in my life, but I've generally found that giving into doubt or fear has just set me up to be skinned.  I'm seeing a massive head-fake here regarding all the commodities, and the fact that I have started to wonder if I made the wrong moves emotionally while I am still convinced of the fundimentals is actually supporting that for me.

In the past, I've gone with my gut, and ended up with a lot of indigestion from it.  Not this time- when everything falls apart, it won't be stocks that people value, it will be metal, food, energy, and other things that everyone needs to live, and I'm holding tight to that strategy.

Your milage may vary, of course, and I certainly don't have a crystal ball.  Good luck with whatever you decide to go for.

sun tzu's picture

It depends on where we're headed. Depression or inflation?

Prometheus418's picture

Does it matter?

In a depression, it can be helpful to hold currency, obviously- but the use of that currency is still to purchase essentials, unless you're looking to get a new big-screen TV on the cheap or something.  If you have the essentials, you don't need the cash- and physical commodities work as barter goods.  Shitty for existing debt, though.

In inflation, it's helpful to have relatively stable trade items, to avoid falling into the velocity trap and being forced into senseless accumulation based on what's available at the moment.  Gold and silver skyrocket- but so do bread and shoes.  If you have the PMs, you don't have to rush to the store to spend as quickly as possible.  Spiffy if you have existing debt with locked in rates. 

Either way, commodities are a solid hedge.  They can suck when things are going only moderately well or moderately poorly- then you're just tying up capital in things you could get whenever you need them for no apparent reason, and forgoing any profit that could be made on that capital.

mjk0259's picture

Chinese stock market is just a scam and the indexes meaningless. Fastest growing economy in the world and you would have made zero investing in it for many years - if lucky . Profits accrue to the government people letting the busines operate not the stockholders. US only 70% as much thievery in stock market.


If this was a plan to screw China, why would people be making commodities lower? They are the biggest buyer of most of them.

Tuco Benedicto Pacifico Juan Maria Ramirez's picture

The key is that PMs will retain their purchasing power in a deflationary or inflationary environment.  Also, hold one month's expenses in green cash as it may be king for a while, then again it might be devalued by 50% overnight so limit how much cash you have laying around.  Also, it might come in handy when an EMP explodes over Colorado in December and the electrical grid goes down. 

Ratzalot's picture

"Also, it might come in handy when an EMP explodes over Colorado in December and the electrical grid goes down."

Uh, what?

sun tzu's picture

Heat source. The Germans in Weimar knew what to do with their Deutschmarks

DosZap's picture



I agree, try and find some, without a $100.00+ Prem............bstds.

Troll Magnet's picture

plat & silver are best buys right now but whereas silver is abundant, the sellers have pulled all their plats off of their shelves. i see it as the phys sellers telling the paperbugs to fuck off.

Kiss My Icelandic Ass's picture

"the Senate just passed a China currency bill 79 to 19 (we don't know what is in the bill yet) ...


I'm sure the Senate doesn't know what's in it either. Isn't that how bills are passed these days ?

Mike2756's picture

This is going to be fun to watch, from a distance.

Long-John-Silver's picture

If you can see the Flash and Mushroom cloud you're dead. There is no safe distance.

Mike2756's picture

Ass to the blast, supposed to work, so we were told.

Long-John-Silver's picture

That just allows them to identify you so they know what Bank accounts to steal.

Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Yes, and stay down anticipating the first "and" second powerful shock wave!

Pool Shark's picture



By "distance" you of course mean from a fallout bunker located on an adjacent planet...


ZeroAffect's picture

Kiss, that was my take. The clowns in CONgress just 'rubber-stamp' any legislation tptb want to inflict upon us and would be very surprised to learn if it contained anything helpful. 

BORT's picture

Senatior Smoot; meet Representative Hawley

History doesn't repeat, but it rhymes


The Tariff Act of 1930, otherwise known as the Smoot–Hawley Tariff (P.L. 71-361)[1] was an act, sponsored by United States Senator Reed Smoot and Representative Willis C. Hawley, and signed into law on June 17, 1930, that raised U.S. tariffs on over 20,000 imported goods to record levels.[2]

The overall level tariffs under the Tariff were the second-highest in U.S. history, exceeded by a small margin only by the Tariff of 1828[3] and the ensuing retaliatory tariffs by U.S. trading partners reduced American exports and imports by more than half.

Most economists at the time and since agree that it had a negative effect on the economy. After the 1929 stock market crash unemployment never reached double digits in any of the 12 months following that event, peaking at 9 percent, then drifted downwards until it reached 6.3 percent in June 1930. Then the federal government made its first major intervention in the economy with the Smoot-Hawley tariff. After that intervention the downward movement of unemployment rates reversed and shot up far beyond the level it had reached in the wake of the stock market crash hitting 11.6 percent in November 1930

Dangertime's picture

The Fed's created the money to create inflation....but China isn't working with us....


Looks like we have to create our own inflation, by tariffs.

Gadfly's picture

In 1940 the U.S. placed an embargo on Japan by prohibiting exports of steel, scrap iron, and aviation fuel to Japan.  In 1941 the U.S. froze Japanese assets.  In December 1941, the Japanese bombed Pearl Harbor.  I just love our idiotic politicians and the way they insist on having history repeat itself.  That's real vision, real leadership.  They are going to lead us right off the fucking cliff... again.  

cynicalskeptic's picture

NEWSFLASH - We left the top of the cliff some time back.   We're in a pack of lemmings in freefall, looking at the other lemmings and thinking that if they fall faster. we'll be OK.  But eventually, we're all going 'SPLAT!'

sun tzu's picture

The last few lemmings fall might be cushioned by ther dead bodies below

bob_dabolina's picture

MR's were reduced for Soybeans. 

Pile into soybeans? /sarc

WestVillageIdiot's picture

I am going to load up on Soy Sauce.  Kikkomen's.  I think I will make a fortune. 

Dr. Engali's picture

We have to vote on the bill so we can find out what's in it.

DosZap's picture

Dr. Engali

No,No,No,No......................................We have to PASS the Bill to see what's in it!!.

(Vouchers for rubber gloves, and KY Jelly).

rich_maverick's picture

Marvelous!  Why not just remove magins altogether and make them all cash markets?...  This slow drip change is just annoying.  At 100%, people would just demand delivery and end this joke of a futures market.

Out9922's picture

Patience young grasshopper

jekyll island's picture

+1.  It's all manipulation of paper, not underlying commodity

fonestar's picture

Do your worst you scam-artist CME fucks!  I own PHYSICAL!!

zorba THE GREEK's picture

Bring it on bitches. The sooner you use up all your ammo, the sooner PMs are going to the moon.

Long-John-Silver's picture

PM's are not going to the Moon. They are going to infinity (and beyond). No one is going to trade PM's for worthless fiat paper Bennie Bucks.