Cme Raises Margins On Gold

They are going to clamp down / lock down electronic trading around the globe / cross border traffic.

One is to raise margins.

They have to do this - do your own DD.

Stay away from 2X and 3X ETFS.

Nothing beats hard assets.

I don't think the CME raised margin requirements with the intention of reducing metal prices though it does have that effect. I think they did that in order to control counter party risk. As the price increases, the margin requirements become a smaller and smaller percentage of the value of the contract. This means the likelihood of a certain move in metal prices would mean that one party will not have the cash ready to make good on the contract. In that case there would be an incentive to default on the obligation.

It's only the PAPER markets that can be so easily manipulated. That is why real physical precious metal markets for silver and gold will start to diverge from the corrupt and manipulated Commodity exchange markets.

In other words, if you want to know the real value of an ounce of Gold or Silver - check ebay or the coin shops. Soon the paper exchanges will be irrelevant! I would never consider holding silver or gold in an exchange (or ETF for that matter). In my mind, if you can't hold it in your hand - you don't own it!

Counter party risk is probably something that many of us would be familiar with. It is when someone does not hold up to their end of the bargain. So it would be like if you sold a car to someone and that person decided not to pay for it or if someone signed a lease to rent an apartment and then decided not to pay the rent.

Paper and bullion markets typically move in tandem most of the time. However, sometimes there is a large divergence until the arbitragers hop on board. Then the paper and bullion prices will be back in synch for a while.

When the CME changes margins back to a typical 5-10% of contract value, markets always make big moves up or down depending on whether they were overbought or oversold. Raising margins now will force many traders to liquidate positions or provide more margin money. Net result is a drop in price that tends to feed on itself until all traders have the required margins for their holdings.

For those of you wanting to increase your gold holdings, now is the time to look for deals. It may be your last chance for months.

I have been anticipating $22 silver at the end of October, but the prices have been holding steady. Now with raised gold margins, $22 silver the 3rd week of October may now actually be a reality. If the gold/silver ratio holds at 40:1, we might even see $1000 gold in a few months. If I am right, every dime I can find will go into PM.

I just looked at a gold chart (http://www.commoditycharts.com/char...CANDLE&a=M). The first support I see for gold is at $1000, with almost impossible-to-penetrate support down to $800. The coming months look like the buying opportunity of the century.

On the support for gold don't under estimate moving averages and fibonacci retracements for support. IMHO I see lots of support higher than 1000/ oz.

http://en.wikipedia.org/wiki/Fibonacci_retracement

He was just joking