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Apparently, there's a reason behind the precious metals rout today.

Precious Metal Warfare Jumps The Pacific, As Shanghai Hikes Gold Margins, Prepares To Crush Silver
Zero Hedge ^ | 08/23/2011 | Tyler Durden

Posted on Tuesday, August 23, 2011 1:59:59 PM by SeekAndFind

Wondering why gold dropped by almost $100 today? Wonder no more: today the Shanghai Gold Exchange lifted gold margins for forward contracts the second time this month to 12% beginning on Friday, in a move that is starting to resemble the CME's vendetta with silver back from May.

Should we expect 3 more SGE margin hikes in the next 2 weeks? Or will the CME rightfully accept the baton and do everything in its power to dent the parabolic rise in the alternative reserve currency? We are cautiously looking at what the CME will do today and will advise readers. In the meantime, here is what else happened in Shanghai:

"China’s main precious metals exchange will also widen daily trading limits for those gold contracts to 9 percent, up from 7 percent, the SGE said on its website on Tuesday. The contracts to be affected include Au(T+D), Au(T+N1) and Au(T+N2). This is the second time the exchange has raised collateral requirements on gold forward contracts this year — both times in August — as international gold prices hit a series of record highs over the past few weeks, boosted by a flight to safety on worries over a stalling U.S. recovery and crippling sovereign debt in the euro zone. Shanghai Gold T+D contract lost half a percent to 387.8 yuan per gram, or $1,884.47 an ounce, down from an intraday high of 391.9 yuan when the market opened."

i saw that. i really didnt think Shanghai would play those kind of games, but i was wrong. Which lends me to think, we get too good, too enriched by any private holdings, watch out, confiscation time. You know, the plastic casings for a 155mm shell, with the screw off top?...might be a good deal to pick up a few...just saying.

neilgin1 wrote:i saw that. i really didnt think Shanghai would play those kind of games, but i was wrong. Which lends me to think, we get too good, too enriched by any private holdings, watch out, confiscation time. You know, the plastic casings for a 155mm shell, with the screw off top?...might be a good deal to pick up a few...just saying.

Im betting its more of a 'patriotic push' type deal...

Help out the country, sell us your gold after we artificially destroy the price...then watch as we inflate the price and pay off all our debts...

Or something...I shouldn't've had that coffee

Ah. They must have anounced the policy change after their market closed, and that's why it looks like the drop was on the New York market. Sneaky.

Internal spies are a big problem in dictatorships as the citizens turn into informers to try to divert the attention of the police elsewhere. There's where letting the neighbors know stuff can bite you in the butt, even if it's stuff that's of no interest /now/. Europeans have experience with that sort of thing, the average American does not, so we have different ideas regarding privacy.

The Red Shield family put up a goodly portion of the funds for the Shanghai Gold Exchange. Nuff said?

AND... CME came thru with another margin hike again.

Did OIL experience similar margin hikes on its run to $140+? I can remember everyone on TV blaming nasty speculators in Wall Street for the run up in oil. But I never got involved in the black stuff to know about any margin hikes.

These margin hikes in PM's seem like an attempt to strengthen worldwide fiat currency status.

Market Harmony wrote:These margin hikes in PM's seem like an attempt to strengthen worldwide fiat currency status.

That's okay. They're just hastening their demise. The longer they suppress prices, the quicker physical will disappear.