We wonder if the collapse in silver price yesterday may have been due to just a tiiiiiiny leak of the fact that overnight, the SGE announced an imminent margin hike. From Reuters: "The Shanghai Gold Exchange said it will raise margins on silver forwards to 18 percent from 15 percent from Monday if the silver contract hits its daily trade limit on settlement on Friday. The exchange said it would lift daily trade limits on silver forward contracts to 15 percent from 12 percent if the contract hits limit up or down on settlement on Friday."
And from the SGE, courtesy of Google :
On the adjustment of silver Ag (T + D) notice of the contract price limits
Given the current silver Ag (T + D) decreased by a big margin, if today silver Ag (T + D) Contract close sealed daily limit, there unilateral market, according to exchange "Shanghai Gold Exchange Risk Control Measures" relevant provisions of the today on the final liquidation, the margin increased from 15% to 18% adjustment, the next trading day (November 21) from the Ag (T + D) contract price limits adjusted from 12% to 15%.
Invites Member units to prepare well in advance of related work and customer notification.
We can only pray that the CME does not take athe hint and start hiking margins on gold and silver on price plunges. At that point one may as well be Celente when investing in paper silver.