This Is Your Silver On HFT – Eric Dubin

TND Market Update:  Eric Dubin

Many of our American readers will no doubt remember that funny television commercial, “This is your brain on drugs.” The camera pans to a frying pan with an egg cracked and fried, sunny-side up. Well, this is your silver on HFT. Could it be more in our face?

Normal markets don’t have trading patterns that follow previous day movement like some guard rail on a Go Cart track, but it happens in the precious metals space with a frequency that boggles the mind. The pattern you see above is the product of trading algorithms and their code executing trades.

There are two groups of traders that have the resources to run HFT: 1) the big speculators among the hedge fund community and real speculators at investment banks; 2) the gold cartel. I’ll leave it to you to decide which are in fact impacting trading today. While this is the “Kitco spot price,” its movement is driven by trading action at the COMEX, LBMA, etc.