Gold price plunges after 'fat finger' trade jolts market

New York (June 26)  Gold sank like a stone at 9am in London after a huge spike in volume in New York futures that traders said was probably the result of a "fat finger", or erroneous order.

Trade shot up to 1.8 million ounces of gold in just a minute, a level not reached even with the surprise election of US President Donald Trump or Britain's vote to leave the European Union.

Gold futures fell as much as 1.6 per cent to $US1236.50 an ounce on the Comex, the lowest for a most-active contract ...

Gold futures fell as much as 1.6 per cent to $US1236.50 an ounce on the Comex, the lowest for a most-active contract since May 17. Photo: Akos Stiller

 

"No one has a clue, apart from the unfortunate individual that pressed the wrong button," David Govett, head of precious metals trading at Marex Spectron Group in London, said of the spike in volume. Thin activity and automated trading may exacerbate such moves, he said.

Others said a trader may have made a larger order than intended, or underestimated the market's ability to absorb so much gold.

Some 18,149 lots were traded on Comex in just a minute, before falling back to 2334 lots an hour later.

Gold futures fell as much as 1.6 per cent to $US1236.50 an ounce on the Comex, the lowest for a most-active contract since May 17. The metal for August delivery settled at $US1246.40 an ounce at 1.37pm in New York, below the 100-day moving average

 

Source: WAtoday