Gold & Silver

Posted by Graham Parlane on 17 April 2012

All

I have had a bearish view of Gold and Silver recently. With that in mind I note Dennis Gartman of The Gartman Letter today.

Firstly regarding the metals traded on the CME, margins are to be cut for Silver, Copper and Palladium as of the close of trading today (overnight). The announcement came last week and normally this would be a reason to take metals prices higher. Instead, prices are weaker, and markets that do not respond to bullish news are not bullish. It is at times that simple and in this case very so. All things being equal, a cut in margin requirements, even a modest one, is bullish although cuts are not nearly as bullish as increases are bearish. Nonetheless here is a demonstrably bullish bit of news and the market’s reaction is manifestly bearish.

In layman’s terms the suggestion here is that if you are bullish of say Gold and the margin is cut allowing you room on your account to buy more then you would do so. To not buy more suggests the bullish view is at best weak, and at worst no longer in favour.

Regards G.

Tags: Broker, Bullion, CFD trading, CFDs, Commodities, Futures, Futures trading, Gold, Gold investment, Gold trading, Precious Metals, Silver, Silver investment, Silver trading, Trader