China's SGE to raise gold, silver margin requirements from Sep 9

Thanks.. the 2 comments on the bottom point out something i haven't considered before, regarding pushing the little guy to the physical market while the big boys gain a even greater control of the price of silver (which is basically derived from paper price) by having a greater percentage of contracts
 
The changed are not very much at all, i wouldn't expect any position liquidations on this announcement as if you can't cover a 1% margin increase then you must be seriously leveraged up.

This is actually a much better approach doing smaller more often margin increased rather than one giant 25% increase or something. It also gets traders prepared when the market moves upward they can expect a increase.
 
I agree, this one won't affect the price too much and in a way i agree with it.. a way to keep price movements more steady. I'm just concerned that we will never see a price of silver over $100 or whatever because everytime the price reaches a level deemed 'too high' by the smokers they will change the rules and bring it down. Eventually you will need 100% down to purchase, if the price goes up again after that, they will increase the minimum ounces/contract. Again, if it goes up after that you can only buy if you are a bank.
Will be interesting to see what they throw at us
 
I think that the only game they play at the moment is just trying to avoid a total currency collapse which will happen if the little guys lose their trust in the papers (already started happening). We can see that unlike what happened in the 2008 crash, this time gold and silver trade higher against most currencies when the markets are falling.
 
The real name for it is Manipulation, that 1% change will increase with out a doubt in the future.
 
Actually margin requirements to a point lose their effectiveness for people who want to manipulate the market. As margins head higher there is more incentive to buy physical as the leverage you get from paper transactions shrink.
 
The CME raised the margin requirements for gold a few weeks ago and although gold was trading lower for a few days it did not stop it from making new highs.
 
But if all the 'small' players that are pushed out of paper market all head to physical then who is left to make the price of silver increase? If the spot price of silver is $50, does that mean a 1 ounce coin on the street is worth $150 just because all the small players are buying physical only because they don't have enough cash for the paper market? I don't think so but maybe i'm missing something.. i'm not a total genius:)
Another example, I can't see Perth Mint selling silver at 50-100% premium to spot just because there is high demand from individuals. They will sell at their usual premiums and if they sell out, they sell out.. come back another day.
These are simply pre-emptive measures for events that the PTB know are coming (people losing faith in currencies and moving to pm's)
 
Most of the population does not buy papers or physical, they only talk about it. But we can see a shift in mentality at the last year or two as the US mint hit a record sales of the silver Eagles and same happened with the Australian silver. The physical market has a very limited supply to offer that can create a price explosion in case that more and more people start buying. In October 2008 when paper silver was down to almost $9 the American Eagles were sold for almost $50 on eBay. This is what will happen again but this time with many more players that will push prices to some crazy levels.

Mike Maloney explains such a scenario in his latest video. It is a good one to watch:

http://www.youtube.com/watch?v=tj2s6vzErqY&feature=player_embedded
 
Another thing of interest on that commodity online page was the headline:

"Iran boosts gold reserves to challenge western embargo"

Judging by the quoted prices though, they bought gold a long time ago - quoting a buy price of 656 an oz!!!!
 
SilverPhoenix said:
Another thing of interest on that commodity online page was the headline:

"Iran boosts gold reserves to challenge western embargo"

Judging by the quoted prices though, they bought gold a long time ago - quoting a buy price of 656 an oz!!!!
Click to expand...

2007ish? considered long time ago for my standard, probably not so long relatively to the gold bull
 
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