MineFund Independent Natural Resources Analysis & Analytics

Mr Broker Goes to the Silver Market

Whilst waiting to fly out of St. Louis airport today, an obnoxious broker was telephoning his clients from the gate area in a voice loud enough to be heard in aircraft still on landing approach.

Not only was he loud, but he was dubiously discussing trading strategies - with clients -  and seemed intent on drawing attention to himself.

So when he started talking about the silver market with a client named Ken, I presumed I was invited to participate in his public forum. He proceeded to inform the client that he had done research and "knew why the silver market got whacked from $46/0z to $35/oz."

"They raised the interest rates for margins on silver three times last month!", he complained, adding, "they didn't do it to gold or copper.

Poor Ken. It's May 9, and his broker is telling him dodgy facts about something that happened most recently on May 4, which is an eternity on the precious metals desks.

The CME Group said on May 4 that it was raising the amount of cash that must be deposited when borrowing from brokers to trade silver. The amount was raised to $21,600 from $11,745 a contract after May 9. CME Group, COMEX's owner has been seeking to damp speculation with an 84% increase in margin requirements.

Doubtless, Ken's big-mouthed broker has been stuffing him full of silver at prices north of $40/oz. The CME Group knows speculators when it sees them.

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