CME Group Inc.’s Comex halted trading in December gold futures (COMEX:GCZ13) for about 20 seconds today at 6:26:41 a.m. New York time, said Damon Leavell, a spokesman for the exchange.
The December contract fell about $11 within a minute before trading was suspended, data compiled by Bloomberg show. Leavell declined to comment on the size of the trade that led to the halt. The “stop-logic” mechanism gives traders the opportunity to provide additional liquidity and prevent excessive price movements.
Gold prices dropped 24% this year through yesterday, heading for the biggest annual drop since 1981. Prices plunged into a bear market in April as equities rallied and amid concern that the Federal Reserve will slow the pace of its stimulus program, eroding demand for the metal as a hedge against inflation. The U.S. central bank is scheduled to publish minutes of its October meeting today.
“We are seeing continued liquidation in gold,” Adam Klopfenstein, a senior market strategist at Archer Financial Services Inc. in Chicago, said in a telephone interview. “Any sudden drop in prices makes people nervous.”
Gold futures for December delivery fell 1 percent to $1,260.90 an ounce at 9:35 a.m. on the Comex in New York, after touching a one-month low of $1,258.