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Endeavour Silver Corp. Message Board

  • quailrunrd quailrunrd Jun 27, 2013 4:15 PM Flag

    Something doesn't smell right at the CME

    Frank Holmes article on 321Gold:

    "However, short-term financial gold traders may be discouraged from acting on this bullish sign, as the yellow metal is now even more expensive to trade. After last Thursday’s huge sell-off, the CME Group, the largest operator of futures exchanges in the U.S., decided to raise margin requirements on gold. As of the close of trading on June 21, the minimum cash deposit for gold futures will increase 25 percent to $8,800 per 100-ounce contract, reports Bloomberg.

    This is the second increase in only three months. In April, the CME raised the initial gold margin requirement, which is what triggered the short-term liquidation out of financial gold ETFs and futures.

    This isn’t a typical move for the CME. Usually, the firm raises margins when prices are rising rapidly to cool down speculation or lowers margin requirements in an attempt to boost liquidity.

    In contrast, cash buying of gold is increasing, and this is good news for two reasons: 1) Retail gold investors are not leveraged like futures gold trader, and 2) their buying tends to be stickier."

    It seems like those speculative "paper buyers" (futures traders) of the PM's are driving physical metal prices down to "blue light specials." So, physical demand remains strong and sellers of silver bullion coins are few and far between. When reality returns, EXK should rise faster than physical metal decent miners are prone to do. But then again....when will reality return with Bernanke dancing all over the tapering map??? Somebody, please get out their ouija board and give us a "reading"!

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