Market is “Nervous” and “Liquidity Remains Poor”

Commenting on today’s weakness in gold, TD Securities Global Precious Metals team wrote the following in a note to clients:

Gold initially saw some investor buying off $1875 level before meeting some profit taking around $1885 (prev series of tops since we broke back below $1900), heading lower into the AM fix and subsequently dropping back to $1865 as the USD gained ground across the board, EUR selling at the forefront and EM under some pressure.

Then another “flash-crash” brought gold down to $1840 in seconds as futures based selling hit the screens – some 6000 lots went through in a hurry dragging the rest of the complex with it, silver is down ~2% this morning. Clearly the market is in a nervous mood ahead of G7 this weekend and liquidity remains poor. $1815/10 looks like initial support (uptrend off August lows and 50% retracement) – some divergence showing on the strength studies too.