Trading and, therefore, liquidity, at lows for the year. A good number of automatic sell orders to protect (stops) profits or to limit losses. Asian investors arriving jetlagged, late, . And a Fed governor who puts words to the feeling of the environment over the weekend.
Result: flash crash (like a mini heart attack) of futures trading on gold and silver just opened the market, early morning in Europe, late-night in North America, first thing in the East.
The futures that trade on both metals came to sink at the start of the week by 4.11 and 7.01%, respectively, as a response and warning of the risk of tapering (withdrawal of stimuli and rise in official interest rates). which is presumed to be accelerated by the United States Federal Reserve (Fed) from Jackson Hole (meeting on monetary policy between August 26 and 28) after the good employment data for July published last Friday and .
Both gold and silver recovered most of the falls in just a few hours, although the warning was there: more than 3,000 futures contracts changed hands in a minute – close to 500 million dollars, according to Bloomberg calculations – as a reflection of the uncertainty that the end of monetary support introduces into the global market.
Warning
It is “a bit early to say, but this type of capitulation usually coincides with a significant drop in the stock markets,” says John Feeney, an expert at Guardian Vaults, in statements collected by the news agency.
“Beyond this sudden drop, gold and silver send the message that the economic impact of the Delta variant should be very limited and the recovery should continue.”
The references that trade on the two metals, considered safe haven assets, correct about 15% from their last maximums, those registered during the pandemic.
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