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Someone decided to wait until Europe closed to dump $5 billion of notional gold into the markets (36k contracts)… makes perfect sense…22,000 contracts in 10 minutes…
Notional value is the total value of a leveraged position’s assets. This term is commonly used in the options, futures and currency markets because a very small amount of invested money can control a large position (and have a large consequence for the trader).
Comment:
Notional?? I call futures E-Motional. So, Emotional Gold opened up for who knows what emotional reason, and then for some other emotional reason like fear of losing a TON of borrowed money on margined futures play, they panic out. They really should limit the commodities markets to the producers and users ONLY.
Most of the “contracts” are really phantom contracts, created out of thin air to give millions of people something to BET on. And artificially establish an incorrect price determined by the BETTING rather than actual supply and demand function, which is probably quite stable and boring.
Picture a super bowl game, and the people in the stands are betting which team will win. Then the team most favored wins. Futures players don’t realize they are being used and abused like a shock absorber in an all terrain vehicle.
They are there only for gov’t price control, and hedging by the actual producers and consumers of the physical commodity. The gov’t ultimately picks winners and losers. Its very important that the masses (and businesses) to get food and fuel etc.
So the gov’t thru manipulating the futures market re Dollar etc can make Oil and Food go up, and causing producers to over produce, and BINGO, you have plenty of cheap Oil.