SAN FRANCISCO (MarketWatch) — Gold futures sank Wednesday by more than $30 an ounce in what analysts have blamed on everything from “fat-finger” trades to technical selling to the expiration of options and futures contracts.
Gold for December delivery fell $31.10, or 1.8%, to trade at $1,7411.30 an ounce on the Comex division of the New York Mercantile Exchange.
It is “very difficult to pinpoint exactly why gold and all precious metals fell,” said Mark O’Byrne, executive director at GoldCore in Dublin. “One thing that we can say for certain was that there was massive, concentrated selling as the New York stock markets opened with some 35,000 lots sold, which is equivalent to 3.5 million ounces.”
The selling was by speculative players in the Comex and was probably “computer-driven algorithm trading,” he said. “It could also have been by a hedge fund or bank trying to protect a large concentrated short position.”
Brien Lundin, editor of Gold Newsletter, said the move was due to the gold options and futures expiration. “When you have numerous gold options and futures expiries occurring simultaneously with a major risk-off trading day, you get a big sell-off in gold and other commodities.”
— Myra Saefong
