Daily Market Report 7/20/15

GOLD

In early Asian trading, half-an-hour after the Shanghai Gold exchange market opened, someone sold 5 tonnes of Gold into this lightly traded market. This sale is way above normal trading volumes and quickly drove the price down to $1,080 per ounce before serious demand appeared, driving the price back over $1,100 per ounce very quickly. This sale was not a result of any news or fundamentals.

Robin Bhar, chief analyst for French banking giant Societe Generale, said, "Illiquidity was important in the Asian overnight move, with other countries on holiday ... it was just a bit of a bear raid and there was nobody on the other side to mop up the selling." More than 3 million lots traded on the primary futures contract on the Shanghai Gold Exchange, compared with the volume for July which averaged fewer than 30,000 lots. Traders said it appeared that sellers had taken advantage of a low-liquidity environment, with Japanese markets closed for a public holiday fuelling speculative selling.

At 11am PDT today, Gold is trading at $1,108, down $26 per ounce on heavy volume.

SILVER

Unlike Gold, Silver did not reach a new low price this morning. The Silver price usually moves in tandem with the Gold price, but that didn’t happen this morning. Silver did reach a low of $14.54, but there wasn’t any serious selling in the Asian markets. At 11am PDT today, Silver is down $0.05 per ounce, trading at $14.85 on heavy volume.