Nearly $1.5 billion was wiped off the value of Australian gold shares on Monday – including $1 billion from the biggest local gold miner Newcrest – after a price crash sparked by the surprise unloading of tonnes of bullion on the Chinese market.
Australian gold miners suffered huge losses in a market that was already suffering a number of stiff headwinds. Evolution Mining lost 14.5 per cent while Northern Star Resources, Regis and Newcrest Mining were all down between 7 and 10 per cent.
Gold plummeted from $US1132 an ounce to $US1092 in the space of minutes just after 11.30am after 5 tonnes of bullion was unloaded on the Chinese market.
However, the price rebounded to $US1109 shortly after and it stayed around that level for the remainder of the day.
“There was some heavy selling on the Shanghai Gold Exchange this morning,” said Victor Thianpiriya, ANZ precious metals analyst.
“Half-an-hour after the market opened we saw five tonnes of gold sold through the Shanghai gold exchange, which is way above normal levels.
“I don’t believe this was a result of fundamentals. Silver prices usually move in tandem with the gold price. That wasn’t the case this morning.”
Mr Thianpiriya said the sale was probably an isolated case of speculation.
“It seems to me that someone was taking advantage of a timezone with lower liquidity. It looks like speculation or perhaps foreselling of some sort but obviously very hard to know for sure.”
Earlier in the day, gold fell to a five-year low pressured by a strong US dollar and expectations for a US interest rate cut.
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