Update: CME issues clarification

The CME has come out with a press release that has clarified their Friday Press Release that triggered significant concerns within the Gold/Silver community.

The CME has announced that their move was actually to DECREASE the initial/maintenance margins so as to decrease the size of margin calls on transferred MF Global accounts. 

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Tues Post#1: All that glitters... is shining brighter

You've heard the talk.

Gold, that barbarous relic, is in a bubble and is going to crash - hard.

And what good is it?  You can't eat it.  It doesn't pay interest.  Why own it?

Last year the CME Group Inc, the biggest operator of U.S. futures exchanges, announced that physical gold could be accepted from its clearing members as collateral.

And yesterday the CME Group Inc said it will more than double the amount of physical gold it could accept from its clearing members as collateral, increasing the amount of bullion its customers could post as collateral to $500 million from $200 million, effective Monday.

Analysts welcome the move because investors could now use physical gold instead of just cash to meet margin requirements of other market products.

So is gold as good as money?  The CME Group certainly thnks so.

The CME announcement made news the same day as the Qatari Royal family made it known they plan to spend up to $10 billion (£6.4 billion) buying stakes in gold producers through their sovereign wealth fund.

Funny how the media isn't jumping all over these two developments as massive mistakes.  Isn't the CME Group Inc. taking a huge risk accepting collateral valued at the top of the bubble?

Aren't the Qatari Royal family courting certain disaster buying into the gold market when it can only collapse from this point forward at the current near record prices?

These moves appear to solidify the belief that precious metals have a long run still in front of them.

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What a ride!!! (Updated)

If you were up last night, Silver took you on an incredible ride.

Action on the overnight GLOBEX was nothing short of astonishing.  At it's high point last night Silver had soared an amazing $3.18/ounce to hit $49.79.

Profit taking brought Silver down a few notches but by the time the action closed for the night the gains were stunning.

With the London markets closed today, Silver took a break before the action started in New York.

I spoke with a work colleague who had purchased his first physical silver just last week (and was looking at gains of 20% for the week) and warned him that today would be highly volatile... both to the upside and to the downside.

The markets didn't disappoint.

In a desperate attempt to cool the market, the CME hiked margin requirements again. Initial and maintenance margins were hiked by about 9%, the third such hike in as many months.

Just like in the previous two months, Silver suffered a big sell-off just before the announcement as the Cartel clearly gave notice to those closely connected. 

So when the markets opened in New York, silver was clawed back to a low of $47.80 in the morning and has been pounded lower throughout the day. We've seen this countless times since August. Many analysts predict Silver to drop down again tonight and tomorrow and possibly even drop near $45.50 or $45. 

IF that happens, look for aggressive buying and a move $50 or even $52 by late next week.

Before long swings of $5.00 a day will occur regularly and this may well become your coffee mug of choice...

Update

COMEX analyst Harvey Organ has come out with his analysis for the day.

As expected, Organ is reviewing the day's trading numbers which confirms the New York trading day was rocked by massive volume orchestrated by the bankers.

• "The total OI on Thursday night was 144,301 and today it was reported that the OI rose quite dramatically to 149,899 for a gain of 5598 contracts. That is absolutely humongous as the JPMorgue dug their heels and heroically supplied the massive non backed paper with reckless abandon....The next data was unbelievable: the estimated volume at the silver comex today was 279,844. No doubt we had some switches but that volume was unbelievable. "

Remember each of these contracts represents 5,000 ounces of silver. So a volume of 279,944 contracts in a day represents  1,399,720,000 ounces of silver traded today.

In analysing the Commitment of Traders Report Organ notes:

• "What have we learned? In silver: the bankers are not covering yet which is a big surprise as they are still adding to their short position. The large specs continue to pile it on hoping for the end game to be played out. The game is between the large specs vs the commercial bankers. The large specs have enormous amounts of dollars to play long. The bankers have enormous amounts of lent dollars from the Fed placed for collateral against billions of paper losses. Without a doubt there will be an epic battle on this front."

Wheee!!!!!

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