FXStreet (Edinburgh) – Analyst Jim Reid at Deutsche Bank assessed the recent sell off in the precious metal, which dropped to fresh multi-year lows during the Asian session yesterday.
Key Quotes
“The move in Gold supported a selloff across most of the precious metal space with Silver (-1.22%), Platinum (-1.62%) and Palladium (-1.47%) also dipping lower”.
“The move has largely been attributed to the prospect of Fed liftoff and the recent strong run in the Dollar with attention moving back to the Fed after recent events in Greece and China”.
“Reuters are also suggesting that the mini flash crash experienced in trading in Asia yesterday (when Gold tumbled nearly 5%) was exaggerated with the relatively low liquidity as CME circuit breakers triggered twice in just one minute with suggestions of large amounts of stop-loss selling”.
“So this will give all of us worried about a lack of trading liquidity more ammunition that this cycle is behaving quite differently in this respect”.
“The moves in Gold also come on the back of the lower than expected reserves data out of China on Friday which we touched on yesterday. The latest leg lower in the commodity complex has now helped take the Bloomberg commodity index to the lowest level since March 2002”.
(Market News Provided by FXstreet)