“Woe to the land whose king is a child and whose leaders are already drunk in the morning. Happy the land whose king is a nobleman, and whose leaders work hard before they feast and drink, and then only to strengthen themselves for the tasks ahead”. (Eccl 10: 16-17)


"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat


Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


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Thursday, June 20, 2013

CME Hiking Margins on Gold

One look at the Gold Volatility Index is all we need to see to realize that the CME was hiking margins....

Initial margin for speculators is being raised from $7,040 per contract to $8,800. Maintenance levels are going to $8,000 from $6,400.

Obviously the computers there at CME Group are projecting a sharp increase in volatility....

15 comments:

  1. you know that we are going into last week of the month and end of 2q, so this may make a low of sorts for the time being; rasing margins on the way down and I wonder what that says?

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  2. Keith Barron on KWN provides another howler when in his second to the last sentence guarantees us all that there is a catalyst forthcoming that will send the PM's to new highs. Only charlatans and clowns make guarantees, so all you silver stackers can feel happy, buying all the way down to ?????? Last bear mkt ended at $5 and are you gonna stack all the way down? Take care everyone, steve in sparks, nv

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  3. Stacking on the way down is possible if you have very deep pockets, are long-term investor, and diversified.
    Jim Sinclair, Jim Rogers, Marc Faber are stacking on the way down.
    I think the question is : are you a long term millionaire investor, or just the usual Joe, doing some dynamic trading in addition to having some physical gold as an insurance against the worst?

    Yesterday's lows are a technical support for gold.
    So, maybe it will hold.
    See 2week candle chart here :

    http://s22.postimg.org/tghcx5att/gld.jpg

    Else, it's down to 1200 $ imho.

    Margin hikes : maybe this is starting to bother Comex?

    http://www.24hgold.com/english/interactive_chart.aspx?title=COMEX%20WAREHOUSES%20REGISTERED%20GOLD&etfcode=COMEX%20WAREHOUSES%20REGISTERED&etfcodecom=gold

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    Replies
    1. Well put Hubert. Indeed, as much as I admire Mr. Sinclair (and am trying to attend one of the forthcoming conferences), his plan for getting out of the system is not feasible for the average joe: flying to Singapore or Hong Hong to open an bank account, having enough gold to store in a private vault, having the means to secure permanent residency in another country.

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  4. http://feedproxy.google.com/~r/JessesCafeAmericain/~3/CSIhLHXzUHU/comex-options-expiration-schedule-for.html
    June ends the first half reporting cycle. But things have already begun beyond the obvious expiry's, margin changes, traditional trader capitulation/nonparticipation, low exchange volumes, offshore numbered proxy accounts, interest rate swaps triggers, limited Fed mortgage backed securities appetite, collateralized debt obligation and credit default swap systemic risk, undercapitalized and illiquid banks, underfunded pensions and entitlement programs, underinsured savings and brokerage accounts, desperate austerity and foreclosure violations, overstated incomes and employment, misrepresented GDP and inflation, underestimated financial fraud and leverage, algorithmic front-running and high frequency "trading", unregulated dark pools of liquidity and shadow markets, global money laundering and counterfeiting, Fed repos and rehypothecated, unallocated metal, high-finance political prejudice and corporatized capture of high profile/TBTF, bailouts and takeovers etc.

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  5. http://d1w116sruyx1mf.cloudfront.net/ee-assets/gsd/funnies/LIBOR.jpg
    Cartoon- High finance LIBOR fix

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  6. Some say that now bullion banks are net long gold, may mean higher margins to aid long prices as those large and small speculators hit by margin hike, may cover big short bets (or pay up).

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    Replies
    1. "the message of patience to bulls remains unperturbed. While a technical trigger (buy signal) is coming, the survivors, void of feel and emotion, will not act without one."

      http://edegrootinsights.blogspot.fr/2013/06/when-will-gold-turn.html

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  7. Thanks Michael3C, Hubert and willy dog, the fear mongers are out in force now. Time to start averaging in. Dan a savior to most of us and yes Sinclair will be correct in the long term.

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  8. Would not want to be long stocks next week. Madows Kramers and the rest of pumpers are going to try to keep some more trading houses alive.

    ReplyDelete
  9. Does ABX get cheap enough that it is a takeover candidate? Not a lot of money in this world for the largest gold producer.

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  10. i swear, these miners will rise so quick when the sector turns...im thankful to have been on the sidelines for a while now but i am itching to go in and just stay in for a few months.....id love to know what dan has to say about the new levels though it must be almost impossible to predict now...it seems to not be able to take out the 1300 today which should be a lil significant...so 1200 - 1300? todays range being 1270 - 1300, gold is up over a percent and yet the miners are down like 2 percent...obviously the general market is down but still a lil surprising given how whacked they are, and even mainstream talking on bloomberg bout the miners value...i remember dan said 1260 - 1280 if 1321 is taken out, he was right there..and yeah 1250 provides some psychological support just in case; but despite mainstream deflation chatter (real john williams being over 7 percent) and miners possibly cutting production at 1200 cos costs overun profit, maybe the bottom really is close? i dont know i can restrain myself next week if gold stays this low, i may just throw myself into these gold shares and wait for the big boys to eventually join as gold becomes attractive again

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  11. Hey anyone seen Mark?
    Thought he would mention how cheap the financials are looking since the 10 Year yield is spiking ferociously here. http://finance.yahoo.com/q?s=^TNX
    Would not think rising rate markets are good for financials especially when they can't reach for risk when the regualators are breathing down their necks for more and better capital.

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  12. So much for the "violatiliy rising so margins are raised" logic. The CME lowered the margins for Treasury futures!
    The Fed P&L just today is down to $45B, with the 10 year getting dumped. No volatility there... move along!

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  13. By the way, effective of today, Shanghai Futures Exchange has lowered margins for Gold in 25%. Given that they seem to be the only real exchange that actually delievers gold, this might be relevant news: http://cl.ly/PpBQ

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