Trades that moved about 4 million ounces of gold awakened the precious metal from its slumber.
After 11:10 a.m. on the Comex in New York almost 40,000 contracts, each representing 100 ounces of the metal, traded in a span of 10 minutes. That triggered a sell-off, sending prices down as much as 1 percent.
The trades jolted the market, which has seen 60-day historical volatility languishing near the lowest since 2001. The metal has struggled to sustain the pace of gains from earlier this year as the outlook for rising U.S. borrowing costs curbs demand for non-interest-bearing assets like gold.
“We didn’t see any headlines, any news to make gold drop $10, but it just did,” Miguel Perez-Santalla, a sales and marketing manager at Heraeus Metals New York LLC, said in a telephone interview. “It’s going with someone who has a huge position that can trigger stops and make the market move in a direction.”
Gold futures for December delivery were down 1 percent at $1,274.60 at 1:21 p.m. in New York, poised for the biggest loss in more than three weeks.
The bullion market has seen similar mysterious trades over the past few months.
Last month, contracts covering more than 2 million ounces of gold traded in just five minutes, sending prices higher. Two months earlier, contracts for a similar amount traded in a minute, propelling the metal higher. In June, the market saw trades for over 1.8 million ounces posted in just a minute.
This article was provided by Bloomberg News.