Margin Requirements Changing in Gold & Silver? (GLD, IAU, SGOL, SLV)

Commodities & Metals

Published: August 4, 2011 12:47 pm

The move up and the sudden move down in gold today has been almost impossible to ignore. Gold was up more than $15.00 above $1,681.00 today, but now gold is DOWN over $20.00 and back under $1,650.00 an ounce. The explanation is a simple one and it is not forced central bank lending. It is not even that our list of nations at risk of losing their “AAA” ratings is a new risk. This is fear that trading margin requirements will be raised.

SPDR Gold Shares (NYSE: GLD) $160.02, -$1.47 (-0.91%)
iShares Gold Trust (IAU) $10.04, -$0.15 (-0.9%)
ETFS Physical Swiss Gold Shares (SGOL) $163.08, -1.53 (-0.9%)

If you think tyhis is just gold, the devil’s metal via silver is down huge and the iShares Silver Trust (SLV) is off a massive 5.9% at $38.21. AGAIN… $40+ has acted like the traders’ deathtrap in silver.

If you absolutely positively HAVE to have a formal reason, the fear is that the ECB will follow Switzerland with a rate cut to become more accommodative. That will drive up the value of the greenback, which generally drives down the price of commodities.

Dennis Gartman on CNBC has even noted a rumor that trading margin for gold is about to be lifted.

JON C. OGG

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