please explain why this would occur

This came through on a DJNewswire:

0219 GMT [Dow Jones] Spot gold experiences sudden bear raid on access market (Comex) just before the Tocom opening at 1200 GMT; gold shot down to $891 vs NY close at $906.20, before rebounding back to $904 within 3 minutes, says Hong Kong-based trader at Japanese house. "The move was so fast the stops were missed on the downside. It's a very unhealthy market." Adds, move was timed to cause maximum disruption and was done with very little volume. "They should stop this kind of thing by having trading limits (circuit breakers)," he says. "We bought only 60 lots when it was down and it shot back $7 straight away. It's hard to trade this," he says. Adds, market has now stabilized, trade lacks catalysts with uncertainty due to swine flu; Trader tips broad $886-$907 range later. Spot gold last at $899.50/oz, down $6.70. (JAC)


Le Metropole Cafe has often (as in every second or third day) refered to this move by the cartel as Plan C. It is done in the access market which is the thinnest gold market of the 24 hour daily trading period. It operates between COMEX closing and TOCOM opening. As a result there is very marginal liquidity. Note the commentary above '(the) move was timed to cause maximum disruption and was done with very little volume.'

ie, maximum effect (for price drop) for minimum effort (volume). Now why would anyone want to dispose of gold at such a time of low liquidity? The intention could not be to maximise profit. So what was the intention? Scare out longs, hit stops, trigger a technical decline?

You be the judge.