CME Margin updates

CME Group Margin Changes Effective CLOSE of Business on 4/16/13

	Previous Initial	Previous Maintenance	New Initial	New Maintenance
10 Troy oz Gold (MGC) – spec months 1-13+	$594	$540	$704	$640
10 Troy oz Gold (MGC) –hedge months 1-13+	$540	$540	$640	$640
COMEX Gold (GC) – spec months 1-13+	$5940	$5400	$7040	$6400
COMEX Gold (GC) – hedge months 1-13+	$5400	$5400	$6400	$6400
COMEX miNY Gold (QO) – spec months 1-13+	$2970	$2700	$3520	$3200
COMEX miNY Gold (QO) – hedge months 1-13+	$2700	$2700	$3200	$3200
COMEX 5000 Silver (SI) – spec months 1-13+	$10,450	$9500	$12,375	$11,250
COMEX 5000 Silver (SI) – hedge months 1-13+	$9500	$9500	$11,250	$11,250
COMEX miNY Silver (QI) – spec months 1-13+	$5225	$4750	$6188	$5625
COMEX miNY Silver (QI) – hdge months 1-13+	$4750	$4750	$5625	$5625
eMini Silver (6Q) – spec months 1-13+	$2090	$1900	$2475	$2250
eMini Silver (6Q) – hedge months 1-13+	$1900	$1900	$2250	$2250

Re-evaluation of accumulation zone for silver

Given gold sliced through the 1350-1370 zone effortlessly, perhaps due to the margin related selling as the CME is raising gold and silver margins, we may have to expect silver to plummet more from the current level. Accumulation zone may arrive if silver goes down further between the 15 to 19.4 levels (this is not a prediction). Being a silver bull, I don't like giving an ugly picture but have to be realistic. As you witnessed yourself, silver can drop more than 3 dollars a day (-12%+) in a single trading day so from the current level of 22.63 (3:09:48 GMT), it doesn't seem hard to drop down further to the 19 dollar level. Based on the weekly chart of silver, I see a lot of support at the 15 dollar level so I'm crossing my fingers that this level will hold.

Having said that, after speaking with a multimillionaire investor who has invested multi millions in both physical and gold & silver savings account (paper), he told me that his thoughts were the following:
If you are a long term investor (without margin), and given you have done your homework and have the conviction that your investment vehicle (ie gold & silver) is ultimately going to much higher levels; than what happens in between for him is like as if it never happened. He bought gold because of world's central banks printing money and devaluing their currency, which will eventually lead to inflationary environment and gold (and silver) is a great store of value. For him nothing has changed.

Liquidation continues with 100+ dollar down day in gold and 3+ dollar down day in silver. Absolutely stunning!

Chart from Kitco mobile app.

Healthy correction in the precious metals

According to, Monty Guild (www.guildinvestment.com), "The Chinese and other wise buyers will add aggressively at 1350-1370, which would be approximately one third correction from 2002 bottom to 1900 top." FULL ARTICLE

If you are looking for a good entry point for silver to go long position; perhaps a good time to do that is when gold indeed targets 1350-1370 zone. Seeing as the current trend is Up for the gold:silver ratio, let's assume a ratio of 63 (from the current level of 57) when gold is 1350. This would mean a price of 21.40 silver. 

Although I don't particularly like seeing silver being smacked down from the 49.00 (and some change) high, the more experienced and wise investors like Mr Jim Rogers may view this as a healthy bull market correction or pull back. To give an example, in 2008, silver fell an impressive 55% from peak to trough.

See the brilliant chart below by Investment Score Inc. ,by:Michael Kilback

Silver will do well in an inflationary environment.

When the Continuous Commodity Index (CCI) is tracking lower (ie. deflationary) silver can not shoot sharply higher. This is because as trader Dan Norcini explains, "SILVER thrives in an inflationary environment. It will not perform in a deflationary environment."

Silver price manipulation on the COMEX

"Every day, silver (and gold) investors are subject to whatever daily pricing the big COMEX paper hangers decide to dictate, irrespective of what the real supply/demand fundamentals would suggest." Theodore (Ted) Butler from the article, The Good, Bad and Ugly

Ted Butler provides the perspective that, "As debilitating and painful as the ongoing silver price manipulation has been, if the manipulation didn't exist, neither would the prime reason for buying silver."

He continues, "Therefore, I can't rule out further silver price stabs to the downside before a dramatic and final resolution to the upside because both stem from the same cause- the manipulation."

Does supply and demand dynamics of gold exist?

We have seen a steady increase in demand for physical gold, yet we have seen  lower prices in the past few months.

Where is the demand coming from?
- India and China are strong buyers
- Central banks are currently net buyers from being sellers
- ETPs around the world, institutions and private investors continue to add to their gold hoards

Supply?
-Annual supply of gold has stayed flat at approximately 4,000 tonnes and comes from new mine production, scrap gold recycling and investor disposition of bullion.

In a recent article by Eric Sprott, the evidence pointing towards the suppression of the gold price is provided. Please see SPROTT ASSET MANAGEMENT

Silver update 20.Feb.2013

Silver has just broke out of the channel (bottom rising trend line) to the downside. Currently 29.08. It needs to quickly recover from here and get above 29.50. If that fails, then 28.00 should provide strong support and I'd be buying some more to add to my core holdings.

Is the bottom in for silver!? 20.02.2013

This is just my personal opinion and not trading advice. Please do your own analysis and research before making the decision to buy silver and trade at your own risk. Thank you!

Latest Technical analysis chart_15Feb2013

Silver - The Element of Change 4FEB2013 [SilverInstituteTV]

One of the most informative videos about silver that I've come across to date. Highly recommended video by, SilverInstituteTV.
Silver is a popular store of value for centuries!! Got silver?

Silver-Real Shortage Out There- Tom Cloud (Cloudhardassets.com)

Tom Fitzpatrick's (Citi analyst) latest commentary on silver on kingworldnews.com

"Good resistance is met at $34.40-35.40 (on silver) and then most importantly at $37.48. A weekly close above that latter level would signal gains back to the April 2011 highs near $50 (a 56% surge from current levels)." Tom Fitzpatrick

Please see FULL ARTICLE

Strong gains for silver. Is a breakout to the upside imminent?

Silver To Rise Over 500% In Next 3 Years - BBC

Mainstream media talks about silver!

Billionaire Eric Sprott, from Sprott Asset Management

Eric Sprott - "Silver Remains The Best Investment Of The Decade"
 

Silver (XAG:USD) showing positive price action 02.Jan.2012

The next move in Silver may be stunning! [Dec 28 2012]

From KingWorldNews:

The silver chart above shows the important moves and consolidations since the advance began in 2003.  Note that the last consolidation lasted 91 weeks.  After silver was then able to break out above the $21 resistance area, it subsequently advanced roughly 150%.  If silver were to replicate a move of that magnitude, after breaking the recent high of nearly $50, it would put the next target for silver at a staggering $125.  

*charts put together by Kevin Wides

ORIGINAL FULL ARTICLE HERE

Silver Vaults Stuffed Means Price Rising 30% in ’13: Commodities [Bloomberg.com]

Silver Bullion Pte, one of Singapore’s largest suppliers of coins and bars to retail investors, says sales tripled since October, part of a global surge in demand that drove holdings to a record.

“Our clients are worried that a major currency crisis or mass bankruptcies would occur,” said Gregor Gregersen, the 36- year-old founder of Silver Bullion, whose sales now average about S$6 million ($4.9 million) a month. “It all has to do with falling confidence in the heavily indebted Western governments and financial institutions.”
Global investment through silver-backed exchange-traded products reached a record 18,854 metric tons in November, or more than nine months of mine output, data compiled by Bloomberg show. Holdings are now valued at about $19.2 billion. Prices will rise as much as 34 percent to $40.25 an ounce next year, based on the median of 49 analyst, trader and investor estimates compiled by Bloomberg.
Silver almost tripled since the end of 2008, lagging behind only platinum in gains for precious metals this year as policy makers from the U.S. to China to Europe pledged more action to boost economies. That’s attracting investors betting that stimulus will stoke inflation and debase currencies. It’s also luring those wagering growth will strengthen industrial demand for silver, 53 percent of which is used in everything from televisions to batteries.

Read more HERE

James Turk's Outlook for Gold for 2013 to 2015