Leading up to the 2011 correction in the silver market margin requirements were raised and was seen as a contributing factor to the eventual sell-off.
Recently, the CME announced it will be lowering margins for Gold, Copper, and Silver.
Could this be a possible catalyst for the next rally in the metals ?
CME Group Cutting Margin Requirements For Comex Gold, Silver And Copper
16 November 2012, 8:00 a.m.
By Kitco News
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(Kitco News) - CME Group says it is lowering margin requirements for gold, silver, and copper futures next week.
The announcement was made in a notice issued late Thursday, with the changes go into effect after the close of business on Tuesday. The changes were the result of the “normal review of market volatility to ensure adequate collateral coverage.”
The “initial” margin for speculators in the Comex 100-ounce gold futures contract was cut to $7,425 from $9,113.
The initial margin for speculative positions in the Comex 5,000-ounce contract was cut to $12,100 from $16,875. The margin for “maintenance” of existing speculative positions, plus all hedge positions, was trimmed to $11,000 from $12,500.
For the main Comex copper contract, the initial margin for speculators was trimmed to $3,850 from $5,400. The maintenance margin for specs, plus all hedge positions, was cut to $3,500 from $4,000.
CME Group also cut the margins smaller-sized contracts for these metals. Additionally, margins were changed—some rises, some declines—in a number of other commodities, including natural gas, live cattle, lean hogs, coal, electricity and refined energy products. The exchange operator also cut margins for several currency futures contracts, including the Australian and Canadian dollars and Swiss franc.
The complete announcement from CME Group can be viewed at this link: http://www.cmegroup.com/tools-information/lookups/advisories/clearing/files/Chadv12-498.pdf.