El Salvador president proposes bill to overturn metals mining ban
In 2017, El Salvador became the first country in the world to ban forms of metals mining.
The gold price started the week on the back foot with an unnerving early fall following a massive sell order that sent the metal to its lowest since mid-May.
Gold futures in New York for delivery in August, the most active contract, dropped to a low of $1,236.50, down 1.5% or $20 an ounce in European trade, a six-week low.
The gold market absorbed a massive $2.2 bln in gold sales in less than a minute and during a period of illiquidity
Source: CME Group
Ross Norman, CEO of gold trader Sharps Pixley, ascribes the sharp decline to a 60 second 56 tonne (1.8m ounces) trade executed at 9am in London:
This bears the hallmarks of a fat finger ‘muppet’ – a trade of 18,149 ounces would be a very typical trade, but a trade of 18,149 lots of a futures contract (which is 100 times bigger) would not be… it leaves us wondering if a junior had got confused between “ounces” and “lots”… or maybe an incorrectly programmed algo ahead of options expiry on COMEX … we just don’t know.
The gold price had recovered much of the lost ground in afternoon trade in New York, exchanging hands for $1,243.60 an ounce.
Norman points out that if the trade, which may also have been carried out by a central bank or a large-scale speculator opening a short position, was indeed an error the gold price bear who made the move is nursing a $36 million loss at this point:
The big take-away though from all this is that the gold market absorbed a massive $2.2 bln in gold sales in less than a minute and during a period of illiquidity … and it ONLY moved the needle 1% lower.
FLASHBACK: Year to the day of $200 shocker, another strange gold price plunge
3 Comments
chill hard
thats how you make sure its a bottom. period.
cordilleran
More manipulation by deep pocketed parties unknown. This starting to get a little old.
Steven Walker
Here is another theory on the PURPOSE behind the gold price drop….
What if someone…let’s say Goldman, Chase or someone like a Sprott who is sitting on millions of ounces and would love to steal more mining companies/properties on the cheap, thought that by dumping and lowering the expectations of where gold might be going would directly impact the first in line….which would be mining companies stocks. Thus they walk in as these companies are on the ropes and “save” them…the management rolls over and the PURPOSE to the drop is achieved. Remember this is for the LONG GAME to them and this would achieve the environment they thrive in. Nobody has FAT FINGERS anymore, as that would take actual physical work to develop. The crypto currencies that are going to be backed by in-ground reserves is the goal of collecting these companies and their assets…..possibly?