Gold Raised to 100% Margin (desperation sets in!!)

[Large Sarge]

http://www.zerohedge.com/news/2013-05-02/next-escalation-gold-goes-100-initial-margin

[osoab]

I wonder if this is a broker that is either wanting to get out of the gold and silver trades or they are hard up on cash and are looking to pull a MFG on their customers.

[ximmy]

can someone explain (in laywoman's terms) what that means?

[Large Sarge]

the cost to open a position has been increased (dramatically)

one of the ways they scare people is to raise costs on carrying their positions (especially those wanting delivery), raising margins, dropping the gold price (in paper at least), even those variable rate bonds, all scream desperation in the gold market

we have a psychological war going on here

I would say the gold cartel is in full blown panic mode, these are huge moves

[Large Sarge]

also Ximmy, since you allow no personal messages, I got to ask this in public, is your avatar you?

[osoab]

can someone explain (in laywoman's terms) what that means?


At first I thought they were buying the full contract, but gold seems incredibly low to be a full contract (less than 10 ounces). The amount for silver would correspond to a 500 oz contract.


So I went to the CME's numbers. Their initial for wilver is 12375 with maintance at 11250

http://www.cmegroup.com/trading/metals/precious/silver_performance_bonds.html

Au is here. Once again not out of line with the CME. Initial then performance.







COMEX 100 GOLD FUTURES
GC
02/2014
12/2014
7,040 USD
6,400 USD



http://www.cmegroup.com/trading/metals/precious/gold_performance_bonds.html


I am thinking non event now or an event that occurred a while ago now being highlighted.

[Large Sarge]

The day many have predicted would come, has finally arrived: 100% initial margin on gold.

For now it is just one Futures Commission Merchant, in this case ex-CBOT traders Crossland LLC (motto: "Where Speed And Service Matter"), but tomorrow it will be another, and another.

In a dramatic flashback to the torrid days of 2011, when the CME and other exchanges desperately tried to scare away the weak hands by raising initial and maintenance margins on paper gold futures ever higher, and when many predicted that eventually the brokers and exchanges would simply do away margin completely in order to make levered trading in paper gold impossible, we have now witnessed the next shot across the bow aimed at all those who dare to oppose the central planners' scheme of forcing everyone out of hard assets, savings, bank deposits and other inert saved capital and into investing in ponzi capital markets, preferably on leverage, or otherwise spend their hard earned cash to buy stuff they don't need and stimulate inflation.

Of course, all this will do is simply shake out even more weak hands, making the residual base of holders that much most stable and not only eliminate the bulk of paper price volatility, but also lead to an even more profound breakage in the link between paper and hard gold.

Below is Crossland's notification to clients that starting tomorrow (we assume), the initial margin on gold and silver, will be 100%. In other words, the utility of a margin account is now null and void when trading PMs.

[Cebu_4_2]

also Ximmy, since you allow no personal messages, I got to ask this in public, is your avatar you?

Of course it is, I took that pic.

[ximmy]

also Ximmy, since you allow no personal messages, I got to ask this in public, is your avatar you?

You have to ask Horn... :p

[Large Sarge]

Of course it is, I took that pic.

I hated to ask, honestly

Ximmy posted 1 pic of herself, way back in the "honest avatar thread", which was like 4 years ago or more, and the pictures by folks lasted a week or so, till everyone got paranoid.....

lol
:)


please disregard ximmy, I was just curious, and your anti personal messages stance forces me to do this in the public...

[Ponce]

I didn't know that she was Mexican, I am now interested in her hehehehehehehehheeheheh.

V

[osoab]

harvey ain't going apeshit.

http://harveyorgan.blogspot.com/

[Libertarian_Guard]

The title here is a bit odd?

It seems to me, that if you need to pony up 100% of the cost of a contract ..... there is NO margin, as there is NO leverage.

May as well buy physical now, if you think the price will rise into the future. Otherwise I don't understand what advantage is left?

[Large Sarge]

The title here is a bit odd?

It seems to me, that if you need to pony up 100% of the cost of a contract ..... there is NO margin, as there is NO leverage.

May as well buy physical now, if you think the price will rise into the future. Otherwise I don't understand what advantage is left?


exactly

and they make it all but impossible to take delivery of gold or silver (the CEO who could not get 2 gold contracts filled), they are trying to cool off/discourage the market....

so speculators will move money away from gold and silver,

or the wise ones will try and find physical.

remember awhile back, antal fekete had the article (beginning of april) and said gold had entered backwardation, the death nail for the dollar, and that's why they slammed the price, etc

he has been saying gold entering backwardation is the end of the world for the dollar, for years now,

this might be one more step to prevent it going back into backwardation (just my own thoughts)

but I respect antal fekete a lot

[gunDriller]

so it goes from $7K & $12K to $10K & $15K for Gold & Silver, respectively, the amount you need to keep in your margin account.

that must be 'in general'. i thought a typical silver position in the futures market was 5000 ounces. as in $120,000.

is the "$15K in your margin account for trading silver" just a 'trading rule' - that sort of doesn't apply to this, other than being a rule change at the same time as the other rule ?


Gosh that does sound complicated.