CME Hikes Gold and Silver Margin Requirements by 50%; Fails to Stop Rally

This is a watershed event. The previous 3 or 4 times the CME hiked on a major up-move (in an uncharacteristically intrusive way), they did succeed in knocking down the advance for a bit. This time, no dice. This likely signifies a major change in the market: loss of control of (currently) capped gold and silver prices through the paper futures market.

Also see this piece with excellent coverage of JP Morgan's little trading dilemma now that silver is taking off:

Recall for a moment how the EE caps price. They do so by flooding the Comex with an almost endless amount of unbacked, paper silver. Think about that trade, though. To sell short, you need a buyer on the other side of the trade. And now, at this late hour, how can you reduce the open interest in the March contract if you're only selling new paper shorts to resolute longs who intend to stand for delivery in eight days? By raiding and selling, you're only compounding your problem because you are creating more open interest! If you're Blythe, you're left with only being able to freely sell the forward contracts in an attempt to influence the spot and nearby price. Does this explain the current backwardation? Probably.

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So the point is this: Ding dong, The Wicked Witch is hurting. Bad. All the years of Evil Empire domination/manipulation of the PMs appear to be coming to a rapid and spectacular end. Watch the Open Interest numbers very closely. They are your tell.