Gold Plummets 5% - Why? Margins!
It was amusing, but not in the good way, to read the usual suspects engaging in market dynamics punditry trying to explain the sharp drop in gold today. Then, I read the WSJ article (dang, should have gone there first). All of a sudden, the light bulb went on, and even then, the real cause was buried at the end of said article.
See, the Shanghai Gold Exchange increased the margin requirements from 11% to 12%. Do you remember the sharp drop in SLV not too long ago? The cause was Comex increasing the margin requirements for silver.
Well, it is deja vu all over again.