Gold exchange traded funds were off more than 3% early Wednesday in volatile action after a German court rejected lawsuits seeking to prevent Germany from participating in the bailouts of European countries.
SPDR Gold Shares (NYSEArca: GLD) slipped 3.5% while gold futures traded around $1,815 an ounce. Prices jumped to a record above $1,920 an ounce on Tuesday, highlighting the recent swings in the precious metal.
“That was a crazy ride for gold Tuesday–there was a new record and then it dropped about $60 in just a few hours,” a Singapore-based trader told Dow Jones Newswires.
Gold prices were down more than $100 an ounce from the all-time high set on Tuesday.
“It was intra-day technical stops,” said a Sydney-based trader told Reuters. “It doesn’t reflect any changes in fundamentals.”
“Someone dumped a big position with little care, which set off stops and caused the price to cascade even lower,” another trader said.
Gold prices have been volatile while the dollar has strengthened in the wake of the Swiss National Bank’s decision to put a specific cap on the franc’s gains versus the euro.
The gold ETF was up 31.9% year to date through Sept. 6, according to Morningstar.
SPDR Gold Shares
Full disclosure: Tom Lydon’s clients own GLD.