Kitco News – Gold prices were trying to benefit Monday from a sharp sell-off in the Chinese equities overnight. China’s stock market saw the biggest one-day drop in eight years, as the Shanghai composite index was down 8.5%. Kitco’s spot gold was quoted down $2.60 at $1,096.90 an ounce. ‘There is so much manipulation, someone is front-running or trying to manipulate the price against an already building short position –- now it appears to be a crowded trade of excessive shorting in gold and we are due for a rally,’ said Frank Holmes, CEO at U.S. Global Investors in an interview with Kitco News. ‘It appears there are two things that happened last week- someone knew that the Flash PMI out of China was going to be negative and they hit the market a week ago and it seemed to be synchronized,’ he said Monday. During Asian trading hours last week, investors dumped more than $500 million worth of bullion in New York in a matter of seconds, with selling occurring almost simultaneously on Chinese markets, Holmes explained. ‘The sheer scale of order flow across both the Shanghai Gold Exchange and the Shanghai Futures Exchange, where combined volume on Monday surpassed the notional equivalent of 250 tons, led many market trackers to speculate that Chinese hedge funds were behind the move,’ Holmes said.
Subscribe to TheStreetTV on YouTube:
For more content from TheStreet visit:
Check out all our videos:
Follow TheStreet on Twitter:
Like TheStreet on Facebook:
Follow TheStreet on LinkedIn:
Follow TheStreet on Google+:
source
