Gold prices tumbling down after CME raised margins on gold contracts by 22%

Not much of a drop considering gold's current price of $1765.60:

www.kitco.com...

As to the reason for its slight downward move, its pure speculation. The change in margin requirements isn't really that drastic considering one can trade $176,500 worth of gold for $7425.

The minimum amount of cash that speculators must keep on deposit for an initial account increased to $7,425 on a 100-ounce contract from $6,075.

As long as we're speculating, I would argue that the downward move is due to profit taking.

And since when do prices move up in a straight line? Gold's rise from $1,000 to $1,500 did not occur without pullbacks.

They say to buy silver instead of gold or gold instead of silver, but it doesn't matter. Get whatever you can get and keep it as long as you can. You'll need it if everything falls apart. Even china will be close to precious metals. Some china has precious metal on it.

reply to post by DJW001


That's a cute graph dude, too bad it doesn't mean anything.

Gold is a commodity and has many uses. Gold as a medium of exchange depends upon people placing value upon it. Gold has an amazing history of being seen as valuable and being used as money, nothing can change that.

reply to post by DJW001


Ahhh, the defender of the status quo. People like you make me laugh as you regurgitate arguments for the corrupt banking system.

The fact is that 1. Gold is not a bubble as it is only owned by less than 1% of the world, 2. It is the only safe haven to preserve your wealth against fiat money systems.

I will give you credit though that your argument did hold credence back in 1980
Why because at that time the US dollar was still considered a safe haven investment. Unfortunately, your banker cronies have completely dismantled the US dollar due to over printing and over spending.

But hey keep spreading that disinformation!

Sooooo . . . let me see if I've got the gist of this . . . in order to buy gold, you actually have to have the money on hand to buy the gold instead of just saying that you do and having some sort of note from mom or a bank or a lending institution or Jesus or somebody who says you're good for it.

If I'm correct in this assumption . . . well . . . How frickin' novel is that to actually have the money to pay for something . . . I tried that at the grocery once and they had me arrested.

Hmmmm . . . gotta love the business world . . . as long as there's no rules, t'is all OK . . . throw in a rule or two and it you've got investors crapping their pants and blowing snot bubbles to no end.

Isn't not having the dough to back purchases how we got into this freaked up mess to begin with . . . somebody tries to put an end to it and it's a BAD thing??????

I'm confused.

Its called speculating. These people who buy gold like that arent investing and preparing for the worlds collapse and then using that gold for money like people here. They buy it and sell it over the internet and flip it. The fact that the margins were raised just means that they cant get as much anymore. They should be glad its not like the margins required on stocks right now.

It will be worth nothing when the Government outlaw's and confiscates it again.They've done it before and they'll do it again.Ah to be sure,too be sure!

reply to post by OnTheFelt

Ahhh, the defender of the status quo. People like you make me laugh as you regurgitate arguments for the corrupt banking system.

The fact is that 1. Gold is not a bubble as it is only owned by less than 1% of the world, 2. It is the only safe haven to preserve your wealth against fiat money systems.

Did I defend the current banking system? I think not; all I did was point out that the price of gold can fall as dramatically as it rises. Precious metals are a commodity, their value is determined by market demand. During a recession, industrial demand for precious metals should drop, as they are used in the manufacture of electronics and luxury consumer goods like jewelry. When the price of a commodity does not reflect the demands of rational market forces, it can be called a "bubble," like tulips were in Holland 400 years ago, internet stocks were 10 years ago and complex financial products were only a couple of years ago.

You cannot eat gold, so it is not as fungible as you think. Try buying a coffee with a gold coin and see what kind of response you will get. If you want to convert actual (as opposed to "paper") gold into cash, you would need to take it to a broker or a jeweler who will not pay you the market value. They might also ask you embarrassing questions about where you got it. If there is a genuine global economic collapse, we may revert to barter. How much will gold be worth then? As I said, you can't eat gold.

reply to post by 13th Zodiac


Damn, history keeps repeating itself and the general public are too brainwashed to even notice it!

there's two aspect of the rise in gold..
one is the speculators, and those of us who are investing in it as a hedge against inflation...
and the other is the inflation that is being caused by them devaluing the currencies...
people are also buying extra toilet paper, canned food ect....since they know that the next time that they go to the store, well, it will more than likely cost more to buy those things!!1 if we all decided to go out and start investing in toilet paper, would we see an amazing rise in that commodity...I think we probably would.
if the people then decided that the toilet paper wasn't the best place, and switched to cans of beans?? well, ya, the price would initially begin falling, but would eventually stabalize above what your paid for it since there is no way that they are gonna correct the deflation of the currencies...
I got a feeling they go a heck of alot more devaluing to do!!
and to put it bluntly, if the whole system collaspes, well....
we are all in the same boat, no matter what we put our money into, unless maybe it's land to farm on!! and of course guns and ammo to protect those crops day or night....and even then, well, you ain't gonna be able to live in peace with a mob of starving people surrounding your crops!!
na, sometimes not being one of the wealthiest people in the world isn't such a grand place to be, and total economic/government collaspe to me would be one of them....I think I would rather give everyone the impression I just ain't got anything worth them blowing my head off for???

you don't buy gold for the preparation of total destruction, it wouldn't do you that much good...
but you do buy it during times you know that inflation is a real possibility, to hedge against it. and well, anyone care to guess when the danger of inflation is gonna end???? my guess is when they write off all the current accounting books as a lost cause and introduce new currencies to start over with!
and then the gold and silver, the canned food, the toilet paper, ect, will still be worth something!!
your dollars, your stocks, well, all that is quite questionable!!

Originally posted by gorgi
Its called speculating. These people who buy gold like that arent investing and preparing for the worlds collapse and then using that gold for money like people here. They buy it and sell it over the internet and flip it. The fact that the margins were raised just means that they cant get as much anymore. They should be glad its not like the margins required on stocks right now.

And speculating should be a criminal offense. The speculator produces nothing of value to others yet takes profit. Somehow it has been allowed.

reply to post by yoesse


That actually is very far from the truth.

Ask yourself this. What would a thin crude oil market look like if it was just refineries and such adding liquidity? Would you like the price of your gas jumping or sliding by 1-2 dollars each day?

You should research why the Chicago Mercantile Exchange was invented and the role speculation plays in adding liquidity in thin markets.