CME Group Inc.’s Comex halted trading in December gold futures for about 10 seconds today at 8:42 a.m. New York time, said Damon Leavell, a spokesman for the exchange.
The December contract fell about $20 within a minute before trading was suspended, data compiled by Bloomberg show. Leavell declined to comment on the size of the trade that led to the halt. The “stop-logic” mechanism gives traders the opportunity to provide additional liquidity and prevent excessive price movements.
Gold prices dropped 23 percent this year through yesterday, plunging into a bear market in April, as equities rallied and amid concern that the Federal Reserve will slow the pace of its stimulus program, eroding demand for the metal as a hedge against inflation. Prices fell to three-month low today amid optimism that U.S. lawmakers are moving toward ending the budget impasse and raising the nation’s debt limit.
“Gold is deeply entrenched in the bear market, and speculation about the political parties reaching some kind of an agreement makes it more difficult to make a case for gold,” Adam Klopfenstein, a senior market strategist at Archer Financial Services Inc. in Chicago, said in a telephone interview. “The technical stops made it worse.”
Gold futures for December delivery fell 2.2 percent to $1,268.90 an ounce at 11:08 a.m. on the Comex in New York, after touching a three-month low of $1,259.60.
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