Shanghai Gold Exchange Hikes Silver Margin By 20%
Wondering what caused the dramatic plunge in gold and silver earlier? Wonder no more: the CME's counterpart in China, the Shanghai Gold Exchange, decided to follow through with an identical, if more substantial, action to that undertaken by the CME on Friday, and announced an increase in the Silver T+D contract margin from 15% to 18%, a 20% bump; the SGE also noted an increase in the price range limit from 12% to 15%, which will be promptly fulfilled, as margin hikes traditionally tend to lead to a sudden spike in vol, contrary to well-meaning expectations. There was a second announcement, slightly more cryptic one, noting that if volatility were to persist, the SGE would outright halt silver trading (although the Google Translation of this previously unseen form announcement is a little sketchy). Expect to see more exchange intervention in precious metals today. Regardless, those who bought silver 15% lower a whopping, oh, two hours ago, courtesy of the out and out sheer panic, are quite grateful to the Chinese.
The Margin hike announcement - link:
Member Unit: silver Ag (T + D) contract Sept 23 close to seal the lower limit. According to "Shanghai Gold Exchange Risk Control Measures" of the relevant provisions, such as Ag (T + D) contract on Sept 26 (Monday) close to limit the same direction (ie, a second consecutive unilateral City), end of the day from the date of liquidation from the Ag ( T + D ) contract margin increased from 15% adjusted to 18% , the next trading day Ag ( T + D ) contract price limits range limit from 12% adjusted to 15% .
And the more cryptic one - link:
Silver Ag (T + D) contract Sept 23 close to seal the lower limit. If Sept 26, Sept 27 days Baiyin Yan swap transactions to limit the same direction, namely to reach the daily limit for three consecutive days, there will be the third consecutive unilateral City. According to "Shanghai Gold Exchange Risk Control Measures," the relevant provisions of Chapter II, once the third consecutive unilateral City, Spet 28 Exchange will suspension of silver Ag ( T + D ) the contract day, and the implementation of the following two measures to resolve any of the market risk.
Measures one: 9 months 28 days to decide whether to take unilateral exchange or bilateral, in the same proportion or in different proportions, some members or all members to improve trading margins, some members or all members suspended new positions, adjust the up (down) circuit breakers rate to restrict some or all members of the withdrawal of funds, the deadline open, forced open, suspension and other measures to resolve in one or more of the market risk. Exchange of relevant measures will be Sept 28 12 -point first through the exchange website, Spet 28 at end of day settlement will go into effect.
Measures II: Setp 28, the Exchange's trading positions held by members of Baiyin Yan period open for an agreement. Specific methods are: Exchange of the Sept 27 (third unilateral City) daily limit price at closing time to declare the transaction Baiyin Yan swap transactions did not open declaration to Sept 26 (second unilateral City) settlement The contract price and the net profit of customers by profitability position to match the size of the transaction, not in Sept 27 to declare open daily limit price does not enter the agreement positions open range. Recommended to prepare closing out of long positions will, in Sept 27 prior to the closing price to sell positions to declare the daily limit, once the exchange using measures two positions will serve as a basis for agreement. Positions held by the same customer-way, the first level their positions, then the method open.
City in the event of three consecutive cases of unilateral, which measures the specific use, the exchange will be based on market conditions, in the Sept 28 12 -point first through the exchange website, please access the Member in a timely manner, and to prepare preparations.
Such as Sept 27 closed, the Bai Yinyan swap transactions did not appear for three consecutive unilateral City, Sept 28 normally open for trading, and maintenance margin ratio 18% , Change stop range limit of 15% unchanged.
Exchange Special Note: As the silver market price volatility and uncertainty of exchange to take measures, in order to safeguard the interests of investors in their own, reminding investors carefully about the risks of exchange control measures, prudent market.
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not gonna help the cartel,,,, its game over for the fiat. they can't print mo money and they can't afford not to print mo money.
Damn - now THERE'S a scary thought: Closing the gold/silver market.
How am I gonna buy more ???
Thank you for posting absolute margins Tyler, we always want absolute as well as % change.
Keep up the good work
If they close it and prices for the real stuff go to 500$ per ounce I'm selling :)
As long as I can get FIAT I'm holding my silver. In Yugoslavia, Hungary, Germany and Zimbabwe among others once the FIAT printing got HOT it wasn't worth converting over :)
I would suggest hang on to the silver till you are ready to buy someting in the physical world.
When he says $500/oz he means he will sell silver for things which cost $500 today. So he means he would use 32 oz of silver to buy a car for example. The $500 is just a figure to compare. Its quite hard to say 1oz for a computer, 1/100oz for a loaf of bread. Nobody would speak like that.
LIke Feteke said, the price of gold/silver is on it's way to zero, as in, they will be unpurchasable with govt paper.
"1oz gold will always buy a nice men's suit."
I contend that
"1oz silver will always buy a cheap suit." What you do w/ it is up to you. I suggest securing your medicine based business plan or maybe one based on foreign militarism with your new found cheap suit. Dress him up like a cheerleader and pose him in a large state governor's office if you dare. Hell, prop him up for the big office on the hill, you can destroy millions of lives there.
That's the point...they can't close the gold/silver markets; they can only intimidate the futures traders.
completely predictable.
Isn't it funny how the more these exchanges act to drive speculators out of the markets in the name of "price stability" the more volatile the markets get.
5 minutes after Europe opened everything reversed. What a surprise. What's gonna happen when NY opens?
Talk of emergency 50 bps ECB rate cut. ECB denied it meaning it is probably imminent.
more at 11
you are obviously mistaken. china is the only country which can move commodities. [/sarc for emerging mkt copper-tards]
"When China does business, why your pussy hurt?"
you likey sweatshop, me likey sweatshop. why you so sore?
roundeye want flied lice withs a stlaw?
The Shanghai Gold Exchange is as corrupt as the Crimex and drives up prices. Now finally a shake-out.
Shanghai Gold Exchange is NOT AT ALL more corrupted than the U.S. one!! as a matter of fact, they are LESS likely corrupted, because China still has NO power to mantipulate the global gold/silver market!! whatever they do, is to follow what the CORRUPTED U.S. and EU have done! Period!
Liu Jun Luo (???) predicted the crash in gold, he was just early by 10 months. Chinese buying has been bubblicious. Fitting that today was the day they launched the gold ATM at Wangfujing in Beijing!
10 months out in timing = WRONG
I'll bet that translation sounded like beautiful bullshit in chinese, too.
While I get the general gist of the article I can sympathize with the ESL crowd.
"Accessing" my "Member in a timely manner" and "prepared preparations"....hmm, chinese porno?
I can give you a better translation.
In the case of three consecutive days of limt down, the Exchange will decide which measure to take according to market conditions. The specific measure will be released at 12 PM Sept 28 (Beijing time). All exchange members are required to get informed on a timely basis and make preparations accordingly.
Thanks, BUT
while your translation is much clearer, the original seemed so much more, um, 'whimsical'.
I think this will be a better translation than the Google Rubbish :) I guess Tyler may use it to replace the lousy google version
All Exchange Members:
The silver AG(T+D) contract closed limit down on Sept 23 (AG (T+D) contract is similar to LBMA deferred accounts but it is an exchange traded product instead an OTC one). According Shanghai Gold Exchange Risk Control Rules, if AG(T+D) closes limit down again (two consecutive days of closing limit down), the margin level of AG (T+D) contract will be adjusted from 15% to 18% at the end of day and the price limit will be raised from 12% to 15% on the next trading day.
All Exchange Members
Silver AG(T+D) contract closed limit down on Sept 23. If the silver contract closes limit on Sept 26 and 27, i.e three consecutive days of being limit down, that will mean the third consecutive day of single directional market movement. According to relevant regulations in Shanghai Gold Exchange Risk Control Rules Chapter II, in the case of the third consecutive day of single directional market movement, on the trading day Sept 28 (21:00 Sept 27-15:30 Sept 28 Beijing time), the Exchange will suspend the trading of silver AG(T+D) contract for one trading day and adopt either of the following measures to deal with risks.
Measure 1: On Sept 28, the Exchange may raise the margin levels of some/all exchange member. The margin level may be raised on one party or both parties of the trading. The margin levels may be raised by the same percentage or different percentage for the two parties of the trading. The Exchange may restrain some/all exchange members from opening new positions. The exchange may adjust price limits. The exchange may restrain some/all exchange members from withdrawing money. The exchange may force exchange members to close positions before a certain deadline or close members’ positions on its own. The exchange may also stop the trading of silver AG (T+D) contract. The specific measure to be adopted will be released by 12PM Sept 28 Beijing time on the Exchange’s website and implemented in the end of day clearing process of Sept 28
Measure 2: On Sept 28, the Exchange will apple contractual position closing for all silver AG(T+D) parties, The process works this way: when the market closes on Sept 27, the exchange will match all the unfilled orders to close long positions at the lower price limit with short positions based on the profit size of all the short positions. The settlement price will be the settlement price of Sept 26. The unfilled orders to close long position at prices other than the lower price limit will not be included in the contractual position closing process. The exchange suggest all the long position holders who are willing to close place their orders at the lower price limit before the closing on Sept 27. Once the exchange adopts measure 2, the orders will be used in the position closing process. If a position holder holds positions on both the long and the sides, all of his short position will be closed before the contractual position closing process.
In the case of three consecutive days of single directional market movement, the Exchange will decide which measure to take according to market conditions. The specific measure will be released at 12 PM Sept 28 (Beijing time). All exchange members are required to get informed on a timely basis and make preparations accordingly.
If on Sept 27, the silver AG(T+D) contract does not experience three consecutive days of single directional market movement when the market closes. On Sept 28, the trading will resume as usual, the margin level will be 18% and price limit will be 15%.
Special Note: Because of the volatility of the silver market and uncertainty of the specific measure that will be adopted by the exchange, for investors’ own good, the exchange suggest investors should carefully study the risk management measures that may be adopted and NEVER ACT ON AN IMPULSE.
This is completely predictable. If you read Shanghai Gold Exchange Rick Control Rule, you will find that SGE just played according to the Rules. When gold/silver closes limit up/down, the margin and price limit will definitely be raised the next day. Shanghai Futures Exchange, Dalian Commodity Exchange and Zhenzhou Commodity Exchange have similar rules.
Please EXPLAIN to me and everyone why margin is INCREASED when prices FALL dramatically. Please tell us how that makes ANY sense what-so-freaking-ever.
To increase margin when prices rise is rational, because it keeps the margin PERCENTAGE more-or-less constant. The decrease margin when prices fall is rational, because it keeps the margin PERCENTAGE more-or-less constant.
So do please explain the logic of your claim.
Please EXPLAIN to me and everyone why margin is INCREASED when prices FALL dramatically. Please tell us how that makes ANY sense what-so-freaking-ever...
Please tell me you're kidding.
Why does a dog lick his balls?
Because he can?
:dog licks balls:
Thomas: I wish I could do that.
buzzsaw99: Go over there and be nice to him, maybe he'll let you.
No, I am not kidding. Are you?
The point of changing margin AT ALL on leveraged instruments is to prevent the leverage from getting excessive. Got that?
Let's say you put up $1000 to control $10,000 for example, the $1000 being margin (to keep this simple, we'll say this is initial and maintanence). This is 10:1 leverage.
If the price of the asset falls to the point where on contract only controls $9,000 then they should require $900 deposit so people STILL have 10:1 leverage. There is no reason when the asset price drops to require $1,200 to control $9,000 when just before you only needed $1,000 to control $10,000. That is fundamentally arbitrary and counterproductive. As I showed, the required deposit should have dropped from $1000 to $900 to stay at 10:1 leverage.
Note: Nobody is saying that people don't need to add money to their account to cover drops in the value of the assets they control on margin. Of course they do! We are saying there is zero justification to require $1200 to control $9,000 when last week $1000 was sufficient to control $10,000. That is blatant manipulation designed to FORCE the price down further.
Wow. The explanation should be patently obvious (as I suspect the other poster meant to imply), but apparently it is not.
The word you are looking for is: volatility.
Exchanges and their members are on the hook for positions that go bad if the position holder doesn't pony up. Margin levels are the means they use to protect themselves. They have formulas---unpublished---on which they rely and that are based on a combination of price and volatility. If the formula was based on price alone, you might have a point. What you have failed to consider is that when a market begins to experience sharp moves, it is possible that a single day's move alone might wipe out the entire margin. Margins tend to be around 3-5%. Any market experiencing a 5% move in a day or over a few days, wipes out the margin of anyone who has been on the wrong side of the trade. In order to protect themselves, the exchanges understandably raise margin levels.
The exchanges also know the net position of the market, because every new position has to be declared as a commercial hedge or an outright speculation. If the exchange knows the spec position to be heavily skewed one way or the other, then they know that a move contra to the net spec position is going to cause a lot of pain and a potential capitulation. Thus in a market that is moving against the net spec position, the exchanges might be prudent if they consider a margin increase.
The reason that they tend not to publish the formulas is because the pit could run the market one way or the other in order to set off the margin hike and squeeze those on the wrong side.
No, the reason they don't publish the formulas is because the formula does not exist as a formula. The "formula" is simply a name given to the arbitrary manipulations ordered by JPM and executed by JPM agents at the exchanges. This is so obvious to anyone who looks, it is laughable to claim otherwise.
They just saved JPM about $20 billion dollars. Maybe more.
I was not aware JPM controlled every single commodity, and every single exchange in the world. Forgive me for being naive, but I thought 1.35 billion Chinese might be willing to stand up to Jamie Dimon, maybe even laugh at him the same way that laughed at Timmy Geithner. Apparently I do not have access to the information you have, which would make what you say "obvious". I also can't figure out why Jamie Dimon---who I suspect is kind of a greedy control freak with little or no conscience (only an opinion)---would keep Blythe Masters on the payroll if she indeed was up against it to the extent Max Keiser claims. Certainly he could have replaced her with Jerome Kerviel and been better off, if the Keiser theory is correct.
Back to your original post, the dependence you cite on price and leverage alone is simply wrong. Vol and net spec profile are considered as well, in everything from silver to frozen orange juice.
In China, unlike in the US, margins are set as a percentage of the notional amount of the contract. For example, if the silver price is $30 per ounce, contract size is 5000 ounces and margin level is 18%, then margin you must place in your account will be $30x5000x0.18=$27000. If the price goes to $40, then the margin you must place in your account will be $40x5000x0.18=$36000.
But when market closes limt up/down, the margin level (as a percentage) will be raised AND/OR the price limit will be expanded at the end of the day.
On Sept 23, the silver contract in China closed limit down, at the end of day, the silver margin (as a percentage of the notional) was not raised but the price limit was expanded for 10% to 12%.
Today, the silver contract closed limit down again. This time the margin level is raised for 15% to 18% and the price limit is expanded to 15%
You did not explain why margin should be increased when the price FALLS, whether the fall is "limit down", or just "down". You did not explain what I asked you to explain.
Gainesville coins site was down for "maintainence" until 9:00am EST monday. What a convinent arrangement when Silver was down to 26.xx. I wonder if someone in Gainesville knew about the dip ahead of the time. They just don't want to sell their inventory at the discount.
Silver may still go down more when NY opens. Gotta keep real money disagreeable to the masses.
Tomorrow will be the option expiry day. $20 silver tomorrow? Hopefully not.
"Gotta keep real money disagreeable to the masses"
How does this effect real money? It appears to me that China is helping it's citizens purchase real physical bullion while at the same time discouraging citizen speculation in PAPER PMs.
It wouldn't hurt my feelings if all the crooked speculative metals exchanges jacked their margins to 100% and demanded physical delivery for anyone taking a position as a 'market maker'...
As long as paper PMs are allowed to set the price for physical PMs we will have no idea what the real price of physical is... and central banks thru bullion banks can continue to sell forward 'leased paper gold' to control the price of physical.
With a little luck the paper players will be whipsawed to oblivion... and a real physical market will arise.
and when it does, there won't be physical in the market. hmm just wonder how long it will take before this happens.
"and when it does, there won't be physical in the market."
Yes, there will be physical for sale in the market. At what price?... Now, that is the question you should have asked.
Another question you should be asking is: Will fiat currencies continue to be accepted for physical gold... and, if so, for how long.
well thats the thing, who would accepted fiat currencies for gold? if people who buy gold know that fiat won't last, why would some one sell it. only time to sell is when you get new money system so that you would be ahead of the pack to invest what the future holds.
yeah that pretty odd. i was about to load up.
futures markets open at 6pm EST on sunday - i doubt they're stupid enough to not hedge so that just leaves too lazy to start working on a sunday when demand is skyrocketing. not the brightest bulbs there. they get the coins from the mint at spot+$2; they could charge a huge premium over the spot and people would still buy because it's down so much. move on to the next dealer, this one is obviously run by a bunch of clowns
Funny you mention a huge premium. I noticed the premium for a Mexican Onza at Apmex is now $74.99. I'm pretty sure it was $64.99 a few days ago.......
of course - gold was $1900 a few weeks ago and is $1600 now, so they figure their customer won't care about another $10. to them, however, it's an extra 100-150% profit (assuming they pay a 3% gold coin premium to the mint like in US).
Mariposa,
ApM&%,has turned into the biggest whores in the market.
I used to use them exclusively,until I found out that JPM is their bank,then it was a no brainer.
Where are all you COMMIES coming from, anyway?!?!?!
What? Really? And somebody here was flapping their lips about APMEX "gouging" people with high premiums on the weekend, and saying Gainesville was "Down for the cause" because they kept "the same low premiums".
This is capitalism in its pure form. I wouldn't sell either.
Gotta know when to hold 'em.
no one is saying it's bad, just the opposite - it's just good business. demand goes up, charge more. what's bad is that a dealer like gainesvillecoins abandons their customers when they're desperate to buy and would be more than happy to pay a higher premium because of the huge drop in price. besides alienating their customers, the dealer is missing out on huge profits as well. instead of both sides winning, both end up losing bigtime.
"besides alienating their customers, the dealer is missing out on huge profits as well."
If Gainsville is sitting on silver eagles that they paid $44 for and they sell them for $34 would you say that is good business?
Maybe Gainsville can cover their losses with larger volumn? lol
Please think about what you are typing prior to typing.
Given the choice of alienating a few selfish custormers that think a company should sell their inventory at a loss for the benefit of the customers, or, going out of business because of heavy losses on silver sales... which choice should a prudent businessman make?
Put another way... Why should Gainsville go BK so you can make windfall profits?
I hope you're joking. Do you think they hold millions of dollars of inventory without hedging it with futures or GLD? Their profit comes from the premium, not from buying at 44 and crossing their fingers and praying to god that it doesn't go down. You're showing a lack of basic understanding of commodity business.
A gold dealer usually buys $X physical and sells the equivalent amount in, say, the COMEX futures. As they sell off their inventory, they buy back the futures. Let's take gold American Eagles. A business can buy them from the US mint at spot+3%, with a minimum of 1000 coins. So let's say a business like gainesvillecoins buys the minimum when the spot is trading $1600. They pay $1,648,000 to US mint and they sell 10 gold futures in the market at $1600 ($1.6M value). We'll say 10 and keep capital gains taxes out of this, to keep this simple. Now they're fully hedged and they don't care whether the price of gold goes up or down. Now, when you buy from a gold dealer, you'll notice how prices are pretty much in line at all of them? That's because they all charge spot+3%mint premium+their own markup (usually 1-3%). If gold goes down to $1000, the dealer doesn't lose anything because his futures short offsets his physical longs. His profit comes only from his own markup. Of course, if a dealer is himself bullish on PMs then he won't fully hedge his inventory, and I'm sure some of them don't, but then their profits are a lot more volatile. But to suggest, as you do, that a serious dealer whose minimum inventory is in the millions of dollars (some of them in the tens of millions) is not close to 100% hedged in a commodity which can move 15% in less than a week, is absurd. In your world, if gainesvillecoins bought all their silver inventory at, say, 35 (they pay spot+$2 to the mint for silver coins), then they'd have to 'close down for maintenance' every time spot went under 33 because all the other dealers would be able to sell it for much cheaper than they, since they are hedged and can sell at spot+$2+own markup. A bullion dealer pretty much has to be fully hedged in order to keep operating, otherwise they'll have to (temporarily or permanently) shut down when spot goes against them.
I realize the future multiplier (100 for gold and 5000 for silver) is pretty high but it's the most liquid and trades almost around the clock during the work-week. I imagine for smaller size they hedge with GLD or SLV when the market is open and I suspect this is what gainesvillecoins does - hence the re-opening time at 9 EST on Monday - market isn't open yet but most high-volume stocks already trade by then. More serious dealers probably have an account with a place like BullionVault, which is open 24-7. It's not as liquid during the weekend, but at least it's open and they can unwind their hedges there anytime.
ETFs have a disadvantage of short-stock cost, but a big advantage of hedging with ETFs, one some dealers realize, is that it's a perfect play for when everyone realizes that they're not worth as much as their price suggests. When it finally dawns on everyone that nothing close to 100% of ETFs are backed by physical, the dealers will profit handsomely on both legs. Basically, being a PM dealer is one of the best businesses to be in right now. It has no downside (hedged), pays dividends (markup), and has humongous upside.
Thanks for the info Smithy. I always wondered how those places made$$$. Learn something new everyday here on ZH :)
I was half owner of a coin/bullion shop in Maryland in the late 60s - early 70s. We carried our inventory using cash reserves; ie, unhedged.
Maybe Gainsville is hedged, maybe not. You don't know either way, unless you are privy to their biz plan and ongoing operations.
IOWs, you are making a hell of a lot of assumptions.
Oh boy.
That explains a lot, at least I can see where you're coming from now. In the late 60s-70s there was no such thing as internet or online stock brokers or gold ETFs or futures. If you wanted to hedge yourself it would be very very difficult and very very expensive. These sites sell thousands, tens of thousands of coins per day so their inventory, and hence risk (if unhedged) is probably a bit bitter than your coin/bullion shop in late 60s-early 70s. Also, these days, if a gold dealer sells 100 1oz gold coins, all he has to do is click his broker icon on his iPhone, buy back 1000 GLD shares, and he's eliminated all his risk and pocketed $3200 risk-free (2% markup on $160K worth of coins). Snidley, as much as you yearn for the good old times, I'm afraid times have changed in the last 40 years, business has changed and the world has changed (mostly for the worse).
You're making a big assumption that I'm making assumptions, not stating facts, if you catch my drift ;)
Not everyone hedges. You can usually tell which ones don't by whether or not they are open on a day like today. Find their downtime statistics and calculate the likelihood that they "just happen" to be down today of all days. I'd bet the probability is less than 0.5%.
You're missing the point. Everyone hedges. The smaller joker-dealers hedge in GLD and SLV or with the futures, so they can only unwind their hedges when those markets are open. The bigger, more serious ones, who don't want to alienate their customers, hedge in markets which trade 24-7 but which are not as accessible to the smaller dealers either because of their size or just pure laziness.
Nope. You are 100% wrong. Small dealers by and large do not hedge. This is why I won't be able to buy physical silver locally for the next two weeks or so, barring further declines, which will only push it back that much more.
MOST small dealers are, in fact, gamblers, which is why they won't last. The smart ones, and the ones that last a long time are hedged, but that is a minority. Sorry, that's the way it is.
I'm sure there's one or two idiots out there but I think you have a few things mixed up.
The reason you won't be able to buy anything in the next two weeks or so is because the moment prices started going down hard, everyone descended on the dealer and bought up his whole inventory. It's not that he's not sitting on them, he genuinely has nothing to sell (and OK, the small ones who didn't hedge are sitting on them, praying to god it goes back up quickly so they can resume business).
It takes a few weeks to order new coins from the mint, that's why you're going to have to wait. If your dealer had any brains, and if you were willing to agree to it, of course, he'd take your order at these prices and promise to deliver when the new inventory arrives. He can order from the mint at today's spot+mint premium (3% for gold 1oz eagle, $2 for silver 1oz.eagle)
But, of course, if you'd agree to that, then you might as well order from an online dealer, which is what you should do now, and not wait 1 or 2 weeks to buy from your local dealer, when prices might be higher.
A lot of people here seem to think that the coin market is the physical market. IT'S NOT! Production always lags demand, so if there's a spike in demand, it takes the US mint a week or two to step up the production. Just because you can't get coins from your local dealer doesn't mean that there's no physical out there, it's just that the producers don't have a crystal ball and couldn't have predicted the 15% drop and a corresponding increase in demand for coins. Order online from big dealers and you won't have the gratification of having it in your hand today as you would with a local dealer, but at least you'll lock in today's big downtick, albeit you'll have to wait a few days to hold it in your hand
Sorry, you don't know what you are talking about. Dealers were open on Friday, but didn't open on Monday. DIDN'T OPEN. Hell, one of the dealers in town just got shut down because he got robbed but didn't have insurance, and couldn't deliver a large shipment that he had already taken money for. The fact is that if they were genuinly out of inventory, they would be open hoping people would come in to SELL.
Also, nice job trying to convince us that people who buy and sell a product are not the market for that product.
OK, you win, not 100% of dealers hedge. Like I said a bit earlier, there are a few out there but othose are gamblers and will only do what's best for them, screwing you in the process. They are not the market and they're not in it for the long-term. They are local here-today-gone tomorrow gamblers and just because they're lying to you by not opening or trying to sell you a silver eagle for $40 when you can buy it for $33 on kitco or tulving or apmex or whatever else is out there, doesn't mean that the physical is now worth $40 or that there's suddenly a shortage of physical out there. The coin market is miniscule compared to the total bullion market, and the 'local-store' coin market is miniscule compared to the total coin market, since most volume is done online, so don't take your cues from your local coin store not being open on Monday.
If you really want to take full advantage of the downticks but don't trust the paper PMs in the long-term (as you shouldn't), open an account with a broker, put in your bids in GLD or SLV where you want to buy and once you buy go to the online dealer which has the smallest premiums, buy from them the same $ amount value, selling the ETFs at the same time. You'll lock in the price you want and will hold physical and nothing else. It will be much much cheaper than buying from a local store and you'll never have to worry about not participating on the day of the big downtick.
What exactly did you sell in your shop?
"Coin/bullion shop"
"Late 60's"
Wait, what? I thought gold ownership was illegal in the US until 1974? Or did you just sell silver?
Smith,
BINGO...........My point exactly.........................GREED.
Seems to be Pandemic these days.
(The only exception to your rule, is if it's a small dealer and they cannot afford to hedge,or choose not to).
But, the BIGGIES we are discussing, are disgusting.
other company's just put larger margin hike on the price. what Gainesville did is "no words". but i do still think silver will get to low 20's and they will pay the price.
BigInJapan
Are you in the BUSINESS or not?
You make your profit ON the PREMS,either your IN the business or OUT .
Commies my ass................
AP#$% has been gouging for months,....................................FEM, and FEED em F HDS.
http://bullion.nwtmint.com/
up, open and taking orders (premium may be higher)
http://bullion.nwtmint.com/
Cant get them to deliver promptly in good times.
Never use NWT mint. They are terrible about delivery. You will spend months wondering whether to ask for your money back or whether to file a complaint with the Attorney General.
wow...i'm really disappointed that gainesville would do this.
buy from providentmetals.com or tulving. there are others. monarch. scootsdale.
so paper silver does have its merits then?
Definitely, you can use the paper to roll a super-doobie, heat your house, remove unwanted fecal matter from your posterior...
Just giving Troll Magnet some business there OldPhart. ;)
There were lots of excuses for not selling over the weekend. Went to my coin shop just to see if they were selling anything and they flat out said no unless I was willing to buy at cost, which was $40 and up. No thanks.
For now dealers are holding out for higher prices on physical. Went to the coin shop on Sat. and their "junk" silver coins still selling at 28x face. I will be watching ebay this week to see if prices come down. Should be at about 20x face or less. Good time to buy from weak hands. The FED has no choice but to print, Fedzilla must be fed fiat or it will die. The govt. can only suck up all the available capital, then they have to print more. Trillion and a half dollar deficits can't be maintained without massive money creation. Not to mention swaps and other treasonous acts.
I was at a coin show Saturday and Gainsville people were there, selling rounds for 32.50, 90% silver at 23 X face value, they had run out of eagles by the time I got to them. 2011 Pandas at 38.
Bought about 500 worth of stuff. I don't blame them. If the Criminals want to knock paper silver to 10, does that mean they have to give it away knowing it's worth 30? Were I in their place I'd do the same
There's no premium for Pandas in China right now.
You sit in the lobby of a PBOC branch and the captive audience video rolls out infomercials of newly-minted commemorative gold and silver coins and ingots, over and over. Literally dozens of different, new ones.
The Panda carry trade is over and any premium you pay here you will eat.
And the PRC Chinese have no interest in our coins.
On Party-run t.v. (every single channel and every single line of print you read in the PRC is filtered through the Party) you have interminable ads for coins, replica coins, fake banknotes (the serial numbers are used as a quasi-lottery, semi-collectible), and reproduction ceramics.
Every trick in the book is employed ("our phones are ringing off the hook!") [cue phone effect]. Like the dealers are dealing with the biggest bunch of rubes who ever rode into Main Street on a load of watermelons. And maybe it's true.
It was interesting being in a country where anyone who wants a job can have one; and the middle class is walking down the Midway with their pockets stuffed with Yuan and eyes shining.
But that may be changing soon.
I'm staying in cash.
"There's no premium for Pandas in China right now." ???
That is NOT true!! can you point out ONE place that I can buy 'no premium" panda coins?
Everywhere I look, still selling for 7%*8% higher premium than Canadian Maple leafs! And Maple leaf price is still well above silver spot price!
here is an example, and Gainesville coins price is pretty competitive!
Panda --Bank Wire Price: $37.81/Credit Card Price: $38.87
http://www.gainesvillecoins.com/products/157011/2011-silver-1-oz-chinese...
maple leaves--Bank Wire Price: $34.51/Credit Card Price: $35.47
http://www.gainesvillecoins.com/products/156308/silver-maple-leaf-1-oz-9...
user2011.
Had the same damn thought, these dicks piss me off.(How fortuitous)
AP#$% the biggest Prems on the block.
When Gold was dropping last Weds my online Dealer sit CLOSED the market at a $100.00 down.(could still phone in orders) but not sell or buy online.
Floor caves in, metals are dissapearing and the prems are going WAY up.
There's no law that says they have to take a loss just because you want to buy..
Yeah
I was on the site trying to place and order and they rejected it. Sais the bank denied my CC. I called the bank and they said there wasn't a problem. I actually saw the item pending in my account. Went back to Gainsville and was able to get the order processed but at a $40 shift. Guess which way. I called gainsville and they had no record of my previous order and said they were swampled. I was online last night after 9:00 and the site was not down for maitenance. It was down at 7:00am cst. Sounds like they could have taken it down as a result of the drop but they woouldn't have to. They just wouldn't change prices. I noticed the spreads have increased from last night. Still got 96 ounces at $31.50 . Will wait to see if we go down to $25 and will average dollar cost more
Yeah
I was on the site trying to place and order and they rejected it. Sais the bank denied my CC. I called the bank and they said there wasn't a problem. I actually saw the item pending in my account. Went back to Gainsville and was able to get the order processed but at a $40 shift. Guess which way. I called gainsville and they had no record of my previous order and said they were swampled. I was online last night after 9:00 and the site was not down for maitenance. It was down at 7:00am cst. Sounds like they could have taken it down as a result of the drop but they woouldn't have to. They just wouldn't change prices. I noticed the spreads have increased from last night. Still got 96 ounces at $31.50 . Will wait to see if we go down to $25 and will average dollar cost more
I just read the Chinese, that last bit is not about halting trading in silver. It just reminds traders to review the exchange's risk-control policies before they enter the market.
You are reading a WRONG piece! Here is the correct piece that mentioning one day of halting if the market has three "Dan Bian Shi" in a row.
http://www.sge.sh/publish/sge/jyzn/jysgg/7470.htm
What is Dan Bian Shi
http://finance.sina.com.cn/money/future/20100415/02087752074.shtml
looks like they are trying to shake off weak hands, that will be drooping like bugs. and stronger hands will be getting it at a discount prices.
Bank Wars III: Revenge of the SLV.
There was a second announcement, slightly more cryptic one, noting that if volatility were to persist, the SGE would outright halt silver trading (although the Google Translation of this previously unseen form announcement is a little sketchy)
Like closing a paper market would be a threat, lol.