Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Gold up Most in 2 Weeks as ‘Flash Crash’ Slips into Distant Memory

Published 08/11/2021, 03:12 PM
Updated 08/11/2021, 03:13 PM
© Reuters.

© Reuters.

By Barani Krishnan

Investing.com - Gold prices gained their most in two weeks, with the ominous “flash crash” that greeted the yellow metal at the start of the week slipping into distant memory amid steady progress made by longs over the past 48 hours to recapturing mid-$1,700 levels.

Gold’s front-month gold on New York’s Comex settled up $21.60, or 1.2%, at $1,753.30 an ounce.

It was a comeback of sorts for the benchmark gold futures contract that just two days earlier settled at its lowest since March 31, at $1,726.50. Also prior to Monday’s U.S. session, Comex gold’s front-month had plunged to $1,672.80 in Asian trading in what has since become known as a flash-crash.

Wednesday’s rebound in gold came as the dollar dipped for the first time in five days against rival major currencies. The U.S. 10-year Treasury note also retreated after a one-week rally. Both of these typically move opposite to gold.

The dollar and the 10-year note both retreated after underwhelming U.S. inflation data for July via the Consumer Price Index. A measure of inflation widely followed by many economists, the so-called CPI grew by 5.4 percent over a one-year period to July — virtually unchanged from June.

“Lower yields and a softer dollar are providing some reprieve or gold which has found its way back towards $1,750,” said Craig Erlam, analyst at New York broker OANDA.

“It was only a couple of days ago that the yellow metal smashed through here in style, with illiquid conditions early in the Asia session adding some rocket fuel to the breakout,” added Erlam. “While it did retest $1,750 later that day from below, that may have been more a case of gold just correcting itself after the flash crash. A rebound off the same level today could be further confirmation of that breakout.”

Gold has been in trouble since Friday's stronger-than-expected U.S. jobs report for July, which spurred bets that the Fed could move more quickly to taper the monthly stimulus of $120 billion it has been providing to the Covid-restrained economy. A rollback in the stimulus and eventual rate hike could send the dollar and yields spiraling in the near-term, spelling doom for gold.

Since January, gold has been on a tough ride that began in August last year — when it came off record highs above $2,000 and meandered for a few months before stumbling into a systemic decay from November, when the first breakthroughs in COVID vaccine efficiencies were announced.

After initially bottoming out at under $1,675, gold appeared to break its dark spell with a bounce back to $1,905 in May. Since then, it has seen renewed short-selling that took it back and forth between $1,700 and $1,800 for a while before the move again toward $1,600.

Latest comments

There should be a check nut for the market when it deepens and rose on a particular day. It should be a fair business to allow the all category of people to participate so that everyone can able to make money from the same and economic growth as well as individuals growth take place in normal and strong economies gaining and improving the economy of the nation.
Dear Tara….thats an ideal way but world doesnt run like that…if it did the gap between poor & rich would not be so vast. Rich ppl dont like others to get rich.
Dear Barani…looks like these people in comments are not happy on gold rise lol….you keep up your good work…i like your reporting on gold.
Thanks for the compliment and encouragement, Sami jee. Gold is doing what it "can", under the highly-rigged environment it is in.
they talked so much that the gold was going to go up. where is this climb??? they talked about the cup handle, I think the handle broke lol now it's just fall and fall
a good candle has to fall 40/50% from the top.
The marketing is a foolish way for the small traders and medium sized traders it's only a gamble because all the money goes into the pockets of billionaires. After all this is becoming a joke for the people who have wrongly enter into the paper marketing. One should all ways avoid to enter into the bogus market. 🙄
it's up 1%?
 Gold has been in trouble since Friday's stronger-than-expected U.S. jobs report for July, which spurred bets that the Fed could move more quickly to taper the monthly stimulus of $120 billion it has been providing to the Covid-restrained economy. A rollback in the stimulus and eventual rate hike could send the dollar and yields spiraling in the near-term, spelling doom for gold. Since January, gold has been on a tough ride that began in August last year — when it came off record highs above $2,000 and meandered for a few months before stumbling into a systemic decay from November, when the first breakthroughs in COVID vaccine efficiencies were announced. After initially bottoming out at under $1,675, gold appeared to break its dark spell with a bounce back to $1,905 in May. Since then, it has seen renewed short-selling that took it back and forth between $1,700 and $1,800 for a while before the move again toward $1,600.
 More here for you, Jason: https://www.investing.com/analysis/golds-flash-crash-calm-after-the-storm-or-more-to-come-200597492
Fed taper?? I dont think this will happen … gold will fly high
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.