Wikinvest Wire

The CFTC, metals trading, and prophylactics

Thursday, March 25, 2010

The CFTC (Commodities Futures Trading Commission) is meeting today to discuss the trading of futures and options in metals markets and the possible use of prophylactics, but not the kind of prophylactics that you were probably thinking of as a simple search on "CFTC prophylactics" reveals this term is used frequently to describe action that the group might take to protect market participants from one thing or another.

You can watch or listen to the proceedings here and the two charts below showing the volume of gold and silver trading on exchanges around the world are from first panel that just included two CFTC officials. The second panel is now underway.
IMAGE As shown above, most of the gold futures trading is done in London via the LBMA (London Bullion Market Association), the world's leading gold market for centuries.

In contrast, more than half of the silver futures trading occurs at the COMEX in New York as shown below where JP Morgan traders have a big presence.
IMAGE It's possible that things could get interesting this afternoon as GATA Chairman Bill Murphy will be part of a panel discussion and, according to this BNN report from late yesterday, he may have a surprise or two in store in the form of someone who has come forward to reveal some sort of untoward market activity that might be aimed at suppressing prices.

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Dan said...

After reading Chilton's comments over the last two days, I think he's missing the mark. He doesn't need to "prove" manipulation, which is a red herring. He simply needs to set position limits for speculators and commercials alike to the same % as other scarce resource commodities. By this action, it would make "manipulation" extremely difficult and if any "manipulation" were to try and persist, then it would more easily be exposed and then he can prove intent. Chilton is gutless because he has the power to adjust position limits now, without all of this hullabaloo.

Tim said...

I missed the third panel - does anyone know if anything exciting happened with GATA "whistleblower"?
In the second panel I did hear one of the guys lay into GATA and their conspiracy theories.

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