• Gold drops sharply by $10 in a matter of minutes
  • Bitcoin extends recent declines and falls below $7000
  • GBP rises after solid economic data
  • Uni Mich consumer confidence falls back below 100; USD lower

A sharp drop in the price of Gold shortly before the European close has caught some traders off guard with little by the way of fundamental news to support it. The fall also appears to be uncorrelated to other markets with no comparable move seen in the USD, stocks or the Tnote. We earlier had noted how the fundamental outlook for the precious metal had worsened of late, but the decline still came as something of a shock. 

 Another market experiencing volatile moves of late is Bitcoin with Wednesday’s sharp reversal lower after making a new all-time high seeing some follow through today with the market falling back below the $7000 level. Bitcoin Gold is expected to go live trading this weekend and it will be interesting to see how the market reacts given the recent fall in the original. 

UK industrial production unexpectedly picked up while a trade gap shrank in September which saw the pound rising to its daily high. Nevertheless construction output wasn’t so impressive as it significantly fell short of the estimate. The initial thrust higher in the pound failed to take hold but throughout the afternoon there has been a notable rise in sterling with the GBPUSD hitting its highest level of the week above the 132 handle. 

Another data point of note was the University of Michigan consumer sentiment with the index making an unexpected fall back below the 100 level to come in at 97.8. The US dollar was trading a little lower on balance ahead of the release and it will have done little to support the greenback going forward.  

Stocks have been fairly subdued today following yesterday’s declines with small losses seen in Asia and Europe with the JAP225 and DE30 both lower by around half a percent. US stocks are little changed on the European close and how they end up today could well prove insightful as to what will occur next week.