Traders befuddled by short, sharp movements in gold prices

|By:, SA News Editor

Gold traders have been puzzling over a series of massive transactions over the past three weeks that have caused the price of bullion to move sharply within a matter of minutes.

The latest incident came in the wee hours of yesterday morning in New York, when a wave of orders to purchase $2.3B worth of gold caused the metal to spike 3% in just 10 minutes.

Theories about what's causing the phenomenon include the effects of 24-hour electronic trading, short covering, selling by a distressed fund and deliberate market manipulation.

Gold is now -0.4% to 1317.20.

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