The sheer carnage that took place in the metals markets on Wednesday managed to surprise even some veteran market-makers and seasoned traders in this niche. The incessant selling gave almost no one a chance to come up for air.
The price washout in precious metals intensified in the wake of the Fed's failure to please the markets with more stimulative action. The disappointment was palpable and, combined with the European debt debacle, resulted in fresh two-month lows for gold.
Following a $44+ slide to near two-month lows and a further overnight dip to lows near $1,650 gold prices attempted to stage a modicum of stabilization and recovery this morning, mainly on the back of a slightly weaker US dollar.
Spot gold dealings lost nearly $38 on Thursday and closed near lows for the day, threatening to breach the $1,700 price support. This morning's near $10 opening advance to $1,715 represented perhaps in part a response to the EU's fiscal accord.
After another feeble attempt at overcoming the seemingly impenetrable $1,750-$1,750 resistance zone gold prices went into somewhat of a freefall following less than encouraging words from Mr. Draghi at his news conference.
Another day of sideways-to-lower price action was beginning to take shape in certain precious metals as banks continued to siphon US dollars ($50 billion since last week and counting) from the ECB amid the on-going liquidity crunch in Europe.
Gold prices once again broke below moving averages as sellers emerged in the wake of a fresh party spoiler by rating agency S&P. With just hours to go prior to the pivotal EU meeting the by now notorious firm issued a blanket warning on euro-zone debt
New York precious metals trading opened the week with mixed price trends. Gold, silver, and platinum fell while palladium and rhodium held steady. Spot dealings showed gold down $12.30 at the opening bell, with a bid-side quoted at $1,734 per ounce.
Call it profit-taking, call it book-squaring, call it news-based trading, the result is the same: volatility remains an integral part of the metals' markets and to a degree that is not comforting to traditional buyers of same.