Spot gold closed at a four-week low on the COMEX today, at $1,695.25. This breakthrough below the psychologically important $1,700 level may encourage the bears overnight. Speaking of overnight trading, eyebrows are being raised of the mystery sell-off last night in the Asian market. This occurred during a time of very light volume (during the lunch hour in Tokyo,) before the New York and London markets had opened. Ross Norman, CEO of Sharps Pixley, believes a large player was deliberately triggering stops in order to short the market.
Despite these manipulations, gold is still up 8.2% year over year,and gold-backed ETFs continue to grow. The dollar is still down over most major currencies, which should provide some support for prices. Long-time analysts note that gold is usually volatile this time of year, as accounts are squared away. Part of the volatility may be natural aftershocks following the $200 an ounce jump gold saw in October, but a large part is the uncertainty surrounding the standoff in Washington over the needed spending cuts and taxes to avoid sequestration locked in during the 2011 debt ceiling fight (aka “Fiscal Cliff”)