Why was $1.5 Billion in Gold dumped in a few minutes?

Gold

Update

Update 7:15 AM. Our Morning Call shows nothing yet on the spoof horizon. A technical report will be posted in about an hour after the spoof window closes.

UPDATE 8:30 PM EDT- Check OI tomorrow. If it decreased, that bolsters the case the seller was very possibly spoofing in a thin market to cover shorts and he triggered sell-stops on the way down, net buying more than he sold. He's not necessarily bearish, but that doesn't matter. He could have 20k contracts to buy in and if the market washes out while he's spoofing it, better buys for him. It's pot odds for a firm that has infinite working capital for margin. Selling 5 poorly to cover 25 is worth it to him/them. This is the more likely scenario than someone selling at the wrong time in a panic.

Watch the activity around the London Fix Pre Yellen as well. If the entity has more to do (spoofing to buy OR selling to sell, doesn't matter), expect a repeat as this is the last chance pre event.- GN

UPDATE 3:10pm: We have a lot of experience being on the wrong side of this type spoof trade. If our hunch is correct, you will see another one of these tomorrow around the same time. Kidding aside, this is what we really think. And have seen it many times before with confirmation from Bullion dealers desks (Republic did it a lot in old days). We give the following the highest probability any time this behavior occurs. This is often also used by a Some American Capital manager right before earnings come out on stocks.

How to Exit your Shorts in Precious Metals:

Someone is short too big for their risk manager
They want to cover before an event
they sell a couple thousand lots in a thin market triggering sell stops of weak longs
The original short covers their short position of anywhere from 8 to 10k lots.This is also why thin mkt is good, as the spoofer will likely be the only buyer.
if not totally filled wait until the next thin mkt opportunity and do it again.
Event happens and they either get short again, or get stopped in long on client resting orders

Also works when a Bullion Bank gets a large buy order and they are short. They spoof mkt lower and buy alongside the client, taking care to fill themselves first.- See PhiBro in its hey day

Sell to Buy?

What would make someone dump $1.5BB (10,000 contracts) of Gold into an illiquid market if not to spoof it lower or mishandle an order for an exiting client? What could the origin of sincere, general, urgency be for this to happen? That is not rhetorical. Mind you we are short and think this is nonsense.- Soren K.

h/t Peter Brandt @PeterLBrandt

Some possibilities:

A client hit a dealing desk OTC all at once and the OTC dealingbank had to act fast to get out- Stupid but possible. In this case the client should be taken out back and beaten for selling at the times they did
A long dealer who has no clue being in this market decides to sell between 5:45 AM and 6:15
Someone wanted to spoof the market lower for a fix perhaps and had the ammo to do it in the form of a client who needed to sell.
Stops were run on someone's book.
Aliens