Many of you are speculating why did the COMEX lower margins on gold with this ancient metal of Kings rising close to its zenith. Silver margins remain high despite silver lower in price
I really like James McShirley of GATA with his reasoning:
The latest reduction in margin requirements for gold is a blatant attempt to siphon speculator interest away from July silver prior to option expiration and first notice day. This is the clearest signal yet that they are on the ropes with silver delivery. At the prior spec margin of $6,751 for gold it already enjoyed leverage of 22.81 - 1, based on $1,540 gold. By decreasing margin requirements to $6,075 they have increased leverage another 11% to 25.35 - 1. This is totally irrational when you realize silver is mired in leverage of only 8.30 - 1, based on $35.85. Gold already had 315% more leverage than silver, yet by reducing gold margins further it now is a whopping 350% higher! This is even more absurd when you realize gold is only 2 1/2% off its all-time high, while silver is still 28% lower than its most recent top. Any CME talk of risk modeling is pure rubbish when leverage of 22 - 1 is increased further to 25 - 1, while silver is clamped at 8 - 1. All risk models must factor leverage ratios, and the CME has thrown that out the window in favor of protecting silver shorts.
I'm sure they think they can better control (and rig) the new spec interest coming into gold futures. There's probably at least a few hedge funds dumb enough to pull out of silver in favor of gold. After all, they can buy 3 1/2 gold future contracts for every 1 silver contract. The CME just tipped their hand BIG time IMO, and they are pulling out all stops before the end of the month. When the silver market blows up it will then be obvious to all that the CFTC was nothing more than an illusion of enforcement, and in reality a PR division of the banking cartel.