evening wrap, december 29
market vibes
very briefly
Stocks were a smidge lower today; oil popped 2% on something from the “geopolitical” salad bar in the Middle East. Choose your own dressing for that one. Elsewhere, atrophy in Bitcoin, FX, and fixed income continues apace. Metals had a very bad day.
In silver
The slide in Asia extended a few dollars lower on the COMEX, and prices stayed in the lower 15% of the day’s range all day indicating unfilled sellers above the market. The silver narrative has been obsessed with short sellers because prices and activity validated that narrative for over a year. The villain has always been there to comfort longs but the evidence of “his” departure is growing with a rising insistence silver is leading us all to perdition…. but not until the doomsayers cash out.
ATM and OTM SLV call gamma from $60 to $85 in calendar 2026 is negligible compared to late 2024 and all of 2025. So, the short in SLV options is gone. If you’re curious for details, ask Grok, but that horse has been put out to pasture, IMO.
Every other tweet in my X feed is hair-pulling about silver crashing the financial system. JPM, current resident of the Woodshed Motel, closed down 1% today after making an all-time high on Friday.
February Gold
Comex futures ripped through the Dec 22 breakout void as quickly going down as they rallied going up and closed the NY session down $200/oz. at 5 PM EST.
The low in Feb gold today was lower than the entry prices of 32,000 lots of long open interest. We’ll see tomorrow how many longs got out. If all 32,000 did sell, then there is an extra 3.2 million ounces of gold on someone’s blotter. If not, the balance of longs are looking askance at near-term support.
Feb Gold in hourly data
Cumulative sell-side volume was high coming into NY, and it accelerated on the Comex opening. The highest volume today was in the first hour of equity trading.
The fact prices didn’t even pause in the Dec 22 breakout void implies a very large and determined sell order was entered on the Comex opening with fill-to-close instructions at 10:30 AM EST. At that time, gold stopped trading for the rest of the session. I think, given the behavior of silver, copper, and PGMs, there will be heavy resistance in Feb gold above $4,400.00..
Platinum in hourly data
…looks just like gold. The seller(s) were probably one or more large CTAs liquidating length into a stampede of mixed selling. However, tick volume in platinum futures was notably smaller than gold and silver, indicating the heaviest selling was in PM ETFs in all three markets. Taxes seem to be a secondary issue.
my vibe
A five percent allocation to gold in January 2025 is 10% today. I can’t imagine portfolio managers are going to increase it at all-time highs in the first month of the year. However, choices for 2026 asset allocation are the iffiest in years. AI news has gone dark. Stocks are expensive by any measure. There are no edges, no safe entries…in anything except natural gas, which is a theta graveyard.
This is a very different December: no Santa rally, record-high leverage and margin debt, and stocks are 1 (one) S&P handle higher than they were on October 1, 2025. I don’t ever recall that happening at all time highs. Imagine if the cost of carry went up?
Well, Scarlett, I’ll think about it tomorrow. In the meantime, have two words for trading in NY today: thin markets. Tomorrow and Friday, even thinner.
night all… good luck in Asia…
JJ
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Hat tip to Gemini...
I asked G
Has there ever been 2 consecutive weeks of margin raises in both gold and silver before today?
<<< Yes, there is a very famous historical precedent for this. While back-to-back margin hikes are rare, they are a classic "regulatory hammer" used by exchanges to break parabolic rallies.
As of today, Monday, December 29, 2025, the CME has indeed just completed a "double-tap" of margin hikes (the first around December 12th and the second announced December 26th). Historically, the most notorious instance of this occurred in 2011.
1. The 2011 "Silver Massacre"
In late April and early May 2011, as silver approached its all-time high of nearly $50/oz, the CME Group raised margin requirements five times in nine days.
The Frequency: This included multiple hikes in consecutive weeks.
The Result: The cost to trade a single silver contract nearly doubled in a week and a half. This forced a massive deleveraging event where silver plummeted roughly 30% in just a few days, dropping from $49 to $34.
2. The 1980 "Silver Thursday"
During the Hunt Brothers' attempt to corner the silver market, the exchange (COMEX at the time) implemented "Silver Rule 7" in January 1980.
The Strategy: While not always weekly, they moved aggressively to change the rules of the game mid-rally, specifically targeting the ability to buy on margin.
The Result: This eventually led to the "Silver Thursday" crash on March 27, 1980, when the Hunts could no longer meet a $100 million margin call.60
3. Comparing Then to Today (December 2025)
The current situation is being compared to 2011 because of the sheer speed of the increases: | Period | Margin Action | Result | | :--- | :--- | :--- | | May 2011 | 5 hikes in 9 days | Silver fell 30% in a week. | | Dec 2025 | 2 major hikes in 14 days | Silver fell 11% today; Gold fell 5%. |
Why does the CME do this?
The official reason is always "to align margins with market volatility." However, traders often view consecutive hikes as a deliberate attempt to "break the back" of a speculative bubble. By raising the cash requirement twice in two weeks, the CME ensures that only the most well-capitalized players can stay in the trade, effectively flushing out the "weak hands." >>>
Note...there is zero mention of Gold.
Cheers,
60
funny. i'm considering selling some physical silver (nothing huge and have had it a long time). called one of the shops here in Toronto and they're not buying until next week. hmmm. lol