Gold Claws Back Some Ground After Early Morning Flash Crash
- Technicals, low liquidity, stop losses trigger drop: Macquarie
- U.S. jobs data add weight to bets the Fed will start to taper
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Gold recouped most of its losses from a sharp plunge at the start of Asian trading, but remains under pressure as bets mount that the Federal Reserve may soon start paring back its massive monetary stimulus.
Spot bullion fell more than 4% early Monday, dropping $60 in minutes, as the selloff following Friday’s better-than-expected employment data accelerated at the start of trading. Gold likely crashed lower after breaching a technical support level and triggering stop losses, on a day when liquidity was low due to holidays in Japan and Singapore, said Marcus Garvey, head of metals strategy at Macquarie Group Ltd.