Gold: Sharp drop signals market volatility – Commerzbank
Gold prices experienced a significant decline, dropping 9% last Friday, marking one of the most extreme single-day moves in years. The sell-off was attributed to forced liquidations and momentum unwinding, reflecting rapid de-risking by systematic traders.

Gold prices experienced a significant decline, dropping 9% last Friday, marking one of the most extreme single-day moves in years. The sell-off was attributed to forced liquidations and momentum unwinding, reflecting rapid de-risking by systematic traders. Despite this volatility, gold remains up 13.3% year-to-date, note Charlie Lay and Moses Lim from Commerzbank.

Market volatility impacts Gold prices

"Gold and silver collapsed by 9% and 26% respectively last Friday. Silver in particular was down nearly 40% from its recent high to its intraday low last Friday, marking one of the most extreme single-day moves in years."

"The speed and scale of the sell-off reflected forced liquidations and momentum unwinding. The pattern had the hallmarks of rapid de-risking by systematic and model-driven traders i.e. market participants using rules-based algorithms that can accelerate moves once key technical or risk thresholds are triggered, amplifying moves on the way up and down."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

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