Today’s AM fix was USD 1,248.50, EUR 929.64 and GBP 775.76 per ounce. Yesterday’s AM fix was USD 1,271.50, EUR 939.69 and GBP 787.11 per ounce.
Gold fell $28.70 or 2.25% yesterday, closing at $1,244.70/oz. Silver slid $0.47 or 2.31% closing at $19.85/oz. Platinum dropped $22.80 or 1.6% to $1,389.00/oz, while palladium fell $9.75 or 1.4% to $708.25/oz.
Gold was trading near four month lows today after its biggest drop in seven weeks yesterday. Another bout of peculiar concentrated selling led to Comex halting trading in December gold futures twice yesterday, the fourth time in less than 3 months.
Minutes of the Fed's October policy meeting suggested that the Fed may start scaling back the U.S. central bank's $85 billion in monthly asset purchases at one of the next few meetings and this may have exacerbated the sell off. ‘Taper’ speculation remains rife despite the increasing likelihood of no taper due to the very fragile state of the U.S. economy.
Gold trading on Comex was interrupted twice, according to Nanex, which provides exchange data and summarizes high frequency trading activity. Thus, trading of gold futures were suspended twice yesterday and four times in the last three months as trading was also suspended on September 12, October 11, and now, November 20.
Nanex reported that about 1,500 gold futures contracts traded in one second at 6:26:40 a.m. Eastern time on Wednesday, triggering a $10 drop in prices and a 20 second trading halt.
Damon Leavell, a spokesman for the exchange said trading was halted at 6:26:41 a.m. New York time, for about 20 seconds. The December contract fell about $11 in less than a minute before trading was suspended.
Leavell declined to comment on the size of the trade that led to the halt. The “stop-logic” mechanism gives traders the opportunity to provide additional liquidity and prevent excessive price movements.
Immediately after the release of the Fed minutes, came another burst of selling which led to gold futures being suspended for another 20 seconds. The second bout of concentrated selling is believed to have been even more than 1,500 contracts. Each contract is worth 100 ounces so 1,500 contracts is worth nearly $200 million.
Myra Saefong of Dow Jones Marketwatch wrote on her blog that, "sudden drops in gold prices and temporary trading halts in gold futures on the Comex division of the New York Mercantile Exchange seem to be becoming the norm."