Massive Paper Trades Creating Instability in Gold Market

Mineweb reports on “a very strange series of gold trades on the futures markets” in the past month — which have caused a mostly downward effect on the spot gold price.

As quoted by Mineweb:

What is apparent from the graphic is that there seem to be massive, almost instantaneous trading volumes every day of over 5,000 contracts (5,000 contracts is half a million ounces) so far this month, all at about the same time and all seemingly designed to move the gold price up or down – with the real massive contract trades on October 1^st, and 10^th – both well over 20,000 contracts (well over 2 million ounces, or around $2.6 billion) traded – all in a matter of minutes (or less).

To put this in perspective, global new mined gold output is in the order of 90 million ounces a year, so a 2 million ounce trade represents  over 2% of global annual mined gold all traded on the futures market in a matter of seconds. 

Read the full article by Mineweb here