Position limits are coming to the silver and gold markets within 174 days or less. President Barack Obama on Wednesday, July 21, 2010 signed into law the most comprehensive financial regulatory overhaul since the Great Depression.
Interestingly, one part of this law may have some teeth to it. Of course, once the big money interests get their two cents in, maybe it won't. But on the surface and actually quite clearly stated by Bart Chilton of the CFTC, there will be position limits in the precious metals markets for gold and silver. This legislation will impose position limits on the amount of contracts that an individual trader can hold.
Not only that, but Bart makes it clear in a video that he produced (watch it at the end of this post) that the new law give the CFTC some real ability to go after and prosecute companies and individuals that manipulate the markets. He specifically mentions "concentration" of positions and manipulation together stating that concentrated positions need to be stopped and that the current CFTC "manipulation standards" are "broken". The new legislation will fix this broken mechanism and allow the CFTC to regulate these limits to ensure free trading markets free of manipulation.
He also talks about how "dark markets" where commodities are traded outside of regulated areas have an important impact on the prices of these markets. He says that traders have been running roughshod over these markets for years and that it has to end.
