Since October, the biggest moves in the gold market has occurred during the Asian Market Session. Most analysts are trying to understand the reasons behind these big moves. It is being suspected that there is a big increase in algorithmic trading. The timing of these big price moves have led some analysts to speculate this as an attempt to catch the Chinese traders off guard during their lunch break.
Liquidity in Asia tends to be thin until Europe wakes up but recent weeks have been different: COMEX gold futures, the busiest gold contract in the world, have suffered sharp sell-offs in Asia, sometimes sparked by the news flow or currency moves but often for no identifiable reason.
“It is unusual for Asia to be seeing these busy trading sessions,” said David Govett, head of precious metals at broker Marex Spectron in London.
“I have spoken to a lot of people about it and the general consensus seems to be that there is a big increase in algorithmic and high-frequency trading in this time zone nowadays as it can be quite easy to push about,” he said.