CME Cuts Gold, Silver, Platinum And Copper Margins
Thursday, February 9, 2012
In a very surprising move, after the close today the CME announced that it has lowered
the margin requirement for gold, silver platinum and copper. 2011 saw multiple
instances where the CME raised margin requirements, the most significant
for silver which saw two series of margin rate increases during 2011 that coincided
with sharp plunges in silver's price. Whether this about face will lead to
a rise in silver, gold, platinum, and copper remains to be seen, but making entering
a futures contract less expensive could lead to price gains. It can certainly
be said that margin increases were accompanied by price declines in 2011.
Initial margin requirements and maintenance margin requirements were lowered by
12% for gold, and 13% for silver. It should be noted that the magnitude of
these margin cuts don't match last year's increases.
It could be an interesting day for precious metals tomorrow.
However, it can be argued that these unexpected changes in the amount of cash required
to take a position in the futures market creates unneccessary uncertainty.
As any investor knows, uncertainty is always unwanted. It bears repeating
that it is Gainesville Coins' view that the CME should be required to provide a
standardized process that helps investors understand when margin changes could be
forthcoming, and their likely amount. This shot out of the blue may be beneficial
for precious metals prices, but it leaves questions on how the CME manages the markets
in its purview.
Take Advantage: Gainesville Coins is offering the 1 oz PAMP
Gold Bar at as low as $21.99 over spot. This is less than 2% over spot for
one of the most popular gold bar investments. Silver bullion investors should
check out our offer on the
2012 American Eagle Silver Coin Monster Box
at as low as $2.59 over spot.
Disclaimer: Gainesville Coins "Market Updates and In the News Section"
provide our readers with features and analysis of the financial markets, and some
of the factors that may be affecting market direction. While the information is
obtained from sources we believe to be reliable, we do not guarantee its accuracy
or its completeness, and this information should not be considered investment advice.
Gainesville Coins provides these articles for informational purposes only, and they
do not constitute a recommendation by Gainesville Coins to hold, to purchase, or
to sell any investment.