Big Al and Trader Rog respond to Mark T’s question about magin requirements.
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HI skii,
First of all, I don’t agree with Jim Sinclair. I don’t think that capitulation has anything to do with it. That implies we will see significantly lower prices ahead.
Regarding the stocks, I don’t know man! All I know is that prices are so low now I continue to buy. (Most recent was New Zealand Energy)
Best,
Big Al
I have a new role for Mr. Hoye: Santa Claus 😉
Thank you so much for your Info. Do you know how we can access to the Bob Hoye’s comment which you did mention, Gold will be at 1790 by end of this month.
But Roger,
The CME only seems to raise margin requirement for precious metals when metals are correcting, never when they are in a rally. Thus they magnify downside volatility that aides and abets short covering by the JP Morgans of the world. Seems to me that if they want to mitigate volatility for the sake of a an orderly and liquid market, they be making margin calls during the rallies. Instead, they let their cronies preposition with shorts before the next coordinated take down that allows the market makers (insiders) to skim money off the top of the market, yet again. In short, instead of regulating the market, the CEM is taking sides and participating in the market. NOt much integrity in that; but there sure are profits to be made fleecing honest investors.
Follow where the money is coming from and where it is going and that will answer the question. The large moving trades selling gold and Silver are the big banks or financials with direct access to the Fed, so their margin limits are extremely large, perhaps in the multi-trillions and more. For all practical amount of dollars being traded in gold and silver futures, these Fed backed entities have no limits. On the otherside of the trade buyers do not have deep pockets of unlimited dollars for many reasons and their margin limits in dollars is a fraction of what the paper sellers can do.
Hi BJ,
You make some interesting points!
Big Al
I heard or read somewhere that a lot of investors tried to take delivery of silver last spring. The exchange didn’t have that much silver. By knocking the price of silver down. It greatly reduced the amount of silver the exchange would have to deliver. To a manageable level. Don’t ever lose that cynicism Rog. It’s one of the best arrows in your quiver 🙂
Stephan…..great point….concerning reduction required
Looked it up. It was a Keith Neumeyer interview in early December. He said the exchange was able to knock 1850 contracts calling for delivery, down to 180.
Wow : What a drop, I already have my physical gold , bought many years ago. I am looking for a cheap entry point for silver rounds. I dont understand why anyone would buy overpriced USA or Canada mint 1 oz. coins –when you can buy rounds for 2 or 3% less cost . you have to wait for delivery 6-8 weeks for many silver coins[private mint rounds] , so why buy the silver expensive. One oz. bars are available as well. I may buy if silver get to 25 or 24. best of health and prosperity to you all. S
sometimes you get diversity in having different types of silver….you do not always know
who is going to buy or what circumstance you will be in when it is time to trade…or sell
I, like you have had my position in for years…but, if you ever go to auctions of coins
it is amazing to see what people will buy or will not buy..so to just get stuck on bulk, may or may not be the ultimate position to be in when the time comes to unload,,,and remember you will not be the only one unloading..so this diversifaction, is a play inside of itself.. remember not every one wants a toyota.
As you know, Scott, it’s partly about recognition…like a little logo on your golf shirt…but also if ever needed as money, a mint-sourced coin might retain it’s premium if used in transactions.
A side point which hardly matters now: I bought a few Maple Leafs in 2002, when the price of silver was $3.80/oz, lower than the $5 CDN face value of the coin, the metals-arbitrage opportunity of the century. Smart buy? Yeah…I only bought a few at that price. Should have mortgaged the home…
What happened on the CME margins is the people were going to take delivery and the CME could not fill the deliveries. So they raised the Margins to get the people to lower the price of silver so the contract holders would sell their contracts instead of filling them.
Brad
I got the Bob Hoye forecast second hand from our broker. I think its aggressive but he’s most always right on trend which is the primary goal. This friday morning early at 653 PST gold is 1595 +1.1% and rising. I called the worst floor at 1550 which is the bottom of the ten year trend lines- we shall see if it holds. My most recent gold forecast on a santa rally was gold 1650. We are up $18+ right now. if monday is exciting and we get +$50-$60; I get my forecast,. silver futures are 29.65 with resistance at $30 (hard) as that was the previous 200-day moving average. My account was up over 300% and is now up just 15%. However, I am not upset as the spreads cover first half of 2012 and I forecast 2050 gold for that cycle. OIl is 94.09 and in the green… Dollar selling and Euro buying. Long bonds up. The trends are correct for a rally of some kind but one day is not a trend. We’ll see. Traderrog
$1790 by month end??!! I don’t think I’ve ever heard Bob Hoye make such an unbelievably aggressive call before. $230 in two weeks. That would be nice, but sounds impossible…Rog, you agree with that call? Just looking at the chart, I can see $1690, but $1790 would require some serious panic buying in a market that rarely moves upward by large amounts in a given day.
On the gold stocks front, watching this market right now, it’s quite obvious participants are waiting for the next shoe to drop. This tells me it’s unlikely that there is another ‘shoe’ at this time…Al/Rog what do you guys think?
Jim Sinclair on yesterday’s sell-off: “If this isn’t a sign of capitulation, I’ve never seen one.”