Flash Crash Shows Why It’s Tough to Be Bullish on Gold Right Now – by Eddie Spence, Akshay Chinchalkar and Yvonne Yue Li (Yahoo Finance/Bloomberg – August 9, 2021)


(Bloomberg) — Gold’s swift drop to the lowest since March has highlighted a tough truth for the precious metal — there’s a growing list of reasons to be gloomy.

While Monday’s flash crash was exaggerated by a combination of technical factors and poor liquidity, the initial trigger remains true — strong U.S. jobs data showed the world’s largest economy is well on its way to recovery.

That sets the stage for the tapering of stimulus by the Federal Reserve, potentially removing one of the key drivers that helped send gold to a record last year.

A strengthening dollar, plus growing expectations that inflation will prove manageable, are adding to the headwinds. Exchange-traded funds have also cut their holdings significantly this year.

Gold traded 1.9% lower at $1,730.13 an ounce by 4:33 p.m. in New York, after earlier tumbling as much as 4.1%. Bullion futures for December delivery fell 2.1% to settle at $1,726.50 on the Comex.

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