Commodity Trade Mantra

Posts Tagged ‘Futures Contracts’

Is Physical Silver About To Overrun Paper Or Do Old Indicators Matter Yet?

Paper markets have consistently fooled gold and silver speculators like hedge funds into going long or short at exactly the wrong time. But if this is indeed the long-awaited physical take-over of the precious metals markets, silver will not only fail to correct, it will go up faster than gold, bringing the gold/silver ratio down to more historically normal levels.

The Cost of Physical Gold vs. Gold Futures

Amongst many, there is one more advantage to physical gold over gold futures. Futures have counterparty risk. You are extending credit. For a short time frame, I wouldn’t worry about it too much. However for a 10-year period, there is a risk that gold could go into permanent backwardation . In that case, futures contracts could become worthless.

Silver: Victim of Motive, Means, and Opportunity

One of the best ways to discourage silver investors is to run the price up, hype it all the way, massively sell futures short near the top, encourage the COMEX to increase margins & ride the price collapse down. Retail investors typically come into the market late, ride it up, feel euphoric until the crash, get out too late & then after huge losses, swear they will NEVER look at silver again.

Gold to Fuel Silver Upleg

Silver is a fascinating market. Almost without exception, all of silver’s biggest and strongest spikes, uplegs, and bull markets in modern history have been fueled by parallel gold rallies. From an investment perspective, silver is ultimately just a leveraged play on gold. Silver investment demand is almost totally dependent on gold’s fortunes.

CME Implements Gold, Precious Metals Circuit Breakers Up To $400 Wide

Effective for trade date Mon, Dec 22, 2014, & pending all relevant CFTC regulatory review periods, NYMEX & COMEX will implement new Rule 589 (Special Price Fluctuation Limits) to apply price fluctuation limits to precious metals futures and options contracts. Wonder why now & what does CME know about upcoming volatility that nobody else does.

Silver Open Interest Anomaly

Open interest is roughly 175,000 contracts, which is about 875,000,000 ounces of paper silver. At market price that is about $13 Billion, or only about 15% of what the Fed created each month during QE3. It would take very little digital currency, relatively speaking, to buy all the open interest, or to crush prices via naked sales of paper contracts.

American Financial Markets Have No Relationship To Reality

The price of gold is determined in a speculative futures market in which bets are placed on the direction of the gold price & not the physical market. The divergence of markets from economic reality disturbs neither public policymakers nor economists, who promote the interests of the government and its allied interest groups.

A Brief Note on the Difference Between Trading and Investing

In general, investing is putting capital at risk for the long term, based on a trend or story the investor believes will have a material impact on whatever financial vehicle he has chosen. In general, trading is shorter-term & technical-based. A trader might buy & sell the chosen financial vehicle many times, based on technical trends & indicators.

Are Silver Prices Set Up for Another Heartbreak?

Most have a clear choice between buying into a conventional stock market, making all time high after all time high. Or buying an asset like silver that is off over 60% from its highs and 100’s of percentage points from conservative inflation-adjusted highs. Even rigged markets do not fall forever.

Even The CME Is Getting Tired Of Silver Manipulation

Everyone has seen the inexplicable bouts of furious selling in gold and silver, coming out of nowhere with no news or catalyst, which serve no rational price discovery but merely there to reprice the market higher or lower. Now CME is getting worried that manipulation is chasing regular retail traders away who are tired of being fleeced daily.

Silver Futures Contracts Soar 354% in January at Dubai Exchange

The Dubai Gold and Commodities Exchange (DGCX) has set its sights on growing its role as a global financial hub and has recorded a thumping start to 2014, with a total of 1,043,200 futures contracts traded in January, an increase of 36% over December 2013.

Zero Hour Approaching When Futures Exchange Runs Out Of Gold Bullion

Gold has being drained out of the Comex warehouses almost nonstop this year and gold inventories are down- A handful of billionaires or just one powerful creditor nation-state with large foreign exchange reserves, such as Russia, could corner the Comex gold market and cause a default.

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