Rumor? No Forex Trading of Gold and Silver in US

 

Important Account Notice Re: Metals Trading

We wanted to make you aware of some upcoming changes to FOREX.com’s product offering. As a result of the Dodd-Frank Act enacted by US Congress, a new regulation prohibiting US residents from trading over the counter precious metals, including gold and silver, will go into effect on Friday, July 15, 2011.

In conjunction with this new regulation, FOREX.com must discontinue metals trading for US residents on Friday, July 15, 2011 at the close of trading at 5pm ET. As a result, all open metals positions must be closed by July 15, 2011 at 5pm ET.

We encourage you to wind down your trading activity in these products over the next month in anticipation of the new rule, as any open XAU or XAG positions that remain open prior to July 15, 2011 at approximately 5:00 pm ET will be automatically liquidated.

We sincerely regret any inconvenience complying with the new U.S. regulation may cause you. Should you have any questions, please feel free to contact our customer service team.

Sincerely,
The Team at FOREX.com

I had this sent to me out of the blue yesterday and I have not been able to verify it on any site. Zero Hedge just ran with it just now, so here goes. My first take on this is that this is not good for Gold in Silver short term, but I believe that this will be a HUGE boost afterwards for physical holders. The email says that as of July 15th US residents cannot trade XAU and XAG on FOREX. Any open positions after July 15th will be eliminated.

First and foremost, this should serve notice that when you are playing in the bankster’s casino they can and will change the rules on you in a heart beat. This is the biggest reason why I do not trade and refuse to have a single dollar in their paper casino. In the short term this will add paper pressure to the price of gold and silver as positions are eliminated. It will be interesting to see what happens as long AND short positions will be eliminated. Knowing that the 8 largest banks are net short 150 days of global silver production, it is unclear at this point to me if they are included in this new policy.

Section 742(a) of the Dodd-Frank act which “prohibits any person from entering into, or offering to enter into, a transaction in any commodity with a person that is not an eligible contract participant or an eligible commercial entity, on a leveraged or margined basis.”

  • Does JP Morgue count as a person?
  • What about a Hedge Fund?
  • What about an accredited investor?
  • Or is this just to keep the little guy out of a leveraged position on a huge move in gold and silver?

The next thing that comes to mind the more the government does not want me to have something the more I want it. Prohibition and price controls never work, they usually cause the underlying commodity to rise tremendously in value as the supply is contracted and demand becomes more desperate. In this case they are not eliminating the availability of the commodity but perhaps the biggest way for people to play this commodity. FOREX is by far the biggest market in the world. Since Gold and Silver are direct competitors of all money and assets it will be very interesting to watch the physical market react to this. Can you imagine billions that once was happy trading bets on the underlying asset now wanting or only be able to buy physical?

The prohibition of Section 742(a) does not apply, however, if such a transaction results in actual delivery within 28 days, or creates an enforceable obligation to deliver between a seller and a buyer that have the ability to deliver, and accept delivery of, the commodity in connection with their lines of business.

This part states that this does not effect those participants that want to take physical delivery. This will add pressure to the market on top of Greece, debt ceiling and QE3.

I have yet to get verification on this but I am sure we will see capital controls, rules changes, margin increases, exemptions, limitations, and just about every other trick in the book to put off the day of reckoning. The long and the short of it is physical silver in your possession eliminates the Elite’s ability to affect you and your wealth. We are going to see massive upheaval and you do not want to learn what counter party risk means when your world is upside down. Get your wealth out of the casino and bring home your wealth into real assets. More on this later…

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