Gold/Silver OTC trading illegal for US residents after July 15, 2011?

reply to post by OBE1

How so ?

The Fx brokers in question offer trade in synthetic currency pairs like XAU/USD - XAG/USD. These off-exchange OTC platforms are unrelated to the physical PM market and/or physical warehouse inventories.

You make a good point let me clarify: I believe they are minimizing their monetary losses they will acrue when the silver naked short squeeze fully blooms. FOREX makes money on trades and user, once silver begins to really move, so will a good number of their users (out of FOREX) that primarily use it for Gold/Silver exchanges and pairings.

On their own ? Are you saying the recent shake-up in Fx Gold/Silver trade is not a reaction to Dodd-Frank ?

Dodd Frank has been enacted since July 21, 2010, and the only market the decide to ween is the precious metals? The still haven't created rules for the derivative markets yet, and that's what caused the 08 meltdown. So why are they clamping on Gold and Silver?

www.opencongress.org...

and by the way guess who is in charge of the financial "oversight" commitee dodd frank created?

(Sec. 1100) Empowers the Federal Reserve Board to act as agent for the Council, and to act on its behalf.

Call me a conspiracy theorist but I think I know where this idea to stop highly leveraged OTC trading came from....

No comprendo. Could you please add a little clarity to this statement ?

FOREX and CMC do not want their exchanges knocked as far askew as others will be in the coming volatility.

And left out of what exactly ?

$$$

Here's an in interesting tidbit i found regarding fort knox and where the Citizens of USA's God really went.

In the 1970's a very courageous gentleman named Edward Durrell claimed that substantially all of the US Gold Reserve being stored at Ft. Knox was gone. Only 1,000 tonnes or so of the 8,500 tonnes supposedly being stored there remained. The rest had been secretly taken from Ft. Knox and shipped to London in 1967 and early 1968 for sale by President Johnson in an ill-fated attempt to keep the price of Gold at $35 per ounce.

Mr. Durrell provided a lot of anecdotal evidence to support his claim. These included eyewitness accounts of hundreds of Army trucks leaving Ft. Knox in the middle of the night over a period of many weeks, supposedly loaded with the Gold bounty. Other interesting but circumstantial evidence was the sudden and unexpected dismissal of Gordon Tether, business editor for London's Financial Times, who published Mr. Durrell's claims. To my knowledge, no mainstream US newspaper dared to publish Mr. Durrell's allegations.

Originally posted by Skerrako
I believe they are minimizing their monetary losses they will acrue when the silver naked short squeeze fully blooms. FOREX makes money on trades and user, once silver begins to really move, so will a good number of their users (out of FOREX) that primarily use it for Gold/Silver exchanges and pairings.

Losses ?

On the contrary, as PM prices continue to rise, spot XAU/XAG products have experienced a surge in popularity. Everybody likes a hot market and FX traders are no exception. The contracts in question offer traders easy, cost effective exposure to short-term price movements in spot Gold/Silver. In fact it was the recent surge in popularity, coupled with an historical reputation for less than reputable Fx brokers that caught the attention of regulators. We're talking about short-term oriented traders here, not buy and hold physical precious metals investors. OTC spot contracts have a 2 day [cash] settlement requirement.

Earlier you said:

Originally posted by Skerrako
They are essentailly stopping paper trading on their own now, so that when the shortage is exposed by August their hands will be "clean".

It's like a game of musical chairs, someone is going to be left out at the end, and FOREX and CMC did not want to be without a chair.

Musical chairs ?

Dirty hands ?



Who are these brokers clamoring to bail on Fx spot trade ? Given the huge "monetary losses" these companies are facing when the shorts default end of month [wink/wink], you should be able to name a bundle by now. Can you name just a few ?

Certainly not my broker, OANDA, and as a matter of fact, not the broker you mentioned either. CMC is scheduled halt trade in Gold/Silver CDFs (Contracts For Difference). There's a virtual chasm between spot contracts, and high risk CFD futures contracts...check it out sometime. But it's really kind of moot since our regulatory authorities declared all CFDs off bounds for US citizens a few years ago.

CMC Markets

Important Information
affecting your CFD account

Dear Customer

As of 29 July 2011, the following CFDs that we offer will cease trading and will not roll into the next month.

Please note that XAUUSD and XAGUSD (Spot Gold and Spot Silver) will still be available to trade. - Full Text

CMC spokesperson says:

Put simply - we still offer spot gold and spot silver as they are more liquid, have a greater transactional flow and have more continuous pricing when compared to silver and gold futures. CMC has stopped trading silver and gold futures purely for commercial reasons (ie we have overwhelming client interest in gold and silver spot products), and is not connected in any way to Dodd-Frank's product prohibition.

CMC didn't want to be without a chair ?

Popular products my friend, and popularity = liquidity, liquidity = spreads, and spreads = revenue [for the brokers]. That's kinda how it works.

Originally posted by Skerrako
Dodd Frank has been enacted since July 21, 2010, and the only market the decide to ween is the precious metals?

Snip....

August 30, 2010

CFTC Releases Final Rules Regarding Retail Forex Transactions

These rules of the road will help protect the American public in the largest area of retail fraud that the CFTC oversees: retail foreign exchange,” CFTC Chairman Gary Gensler said. “All CFTC registrants involved in soliciting and selling retail forex contracts to consumers will now have to comply with rules to protect the investing public. This is also the first final rule that the Commission has published to implement the Dodd-Frank Wall Street Reform and Consumer Protection Act. We look forward to publishing additional rules to protect the American public.” - Full Text

And here's the CFTC. Note Retail Foreign Exchange Transactions.

Final Rule Regarding Retail Foreign Exchange Transactions

The Commodity Futures Trading Commission (CFTC) announced the publication in the Federal Register of
final regulations concerning off-exchange retail foreign currency transactions. The rules implement provisions
of the Dodd-Frank Wall Street Reform and Consumer Protection Act as well as the Food, Conservation, and
Energy Act of 2008. - Continues

Originally posted by Skerrako
The still haven't created rules for the derivative markets yet, and that's what caused the 08 meltdown. So why are they clamping on Gold and Silver?

The regs apply to all retail Fx transactions, and the companies that broker 'em.

FYI...XAG/XAU are derivatives. The sketchiest type > OTC financial derivatives, with associated counterparty risk.

GL.........come August 5

Gold is still hitting new highs, reaching $1,641 an ounce this morning on the Comex in New York. Although the debt ceiling seems like an obvious culprit, there’s been a lot of other data out there boosting gold’s price.

First, U.S. GDP estimates for the second quarter came in at 1.3 percent. That’s a pretty weak number. For a mature economy like the United States, GDP growth needs to be consistently around 4 to 5 percent in order to keep the economy at full employment and production capacity.

Meanwhile, the first quarter GDP numbers were revised down from 1.9 percent to 0.4 percent. That’s an 80 percent reduction from what was calculated last quarter.

The real economy is showing no real signs of growth, and that includes a time period that included some major easing by the Fed. It will also likely get worse before it gets better. Next quarter’s numbers will be affected by a slowdown in government spending tied to the debt ceiling drama.

Manufacturing numbers continue to show a slowdown, as does the rise in unemployment numbers (with a big bump in new jobless expected in figures to be released later this week).

Other governments are taking the hint that the United States can’t get its fiscal house in order. They’re moving to gold. South Korea’s central bank has bought over $1 billion of gold to boost its reserves in recent months. That’s given the bank a 17-fold boost in its gold holdings! Also in the past few months, the central bank of Thailand has increased its gold reserves 15.5 percent.

That said, we could still see some big down moves in gold following its rise. For example, gold briefly sold off on Monday morning on the announcement that the House would pass legislation to resolve the debt ceiling, only to climb higher on poor manufacturing data. I’m still staying cautious on gold. After all, the summer is usually gold’s weak season, and gold prices can be quite volatile.