No clear villian causing Gold 2 day crash

The two-day crash in the price of gold is one of the most devastating asset sell-offs ever witnessed on Wall Street, right up there with the stock market crash of 1987. What makes it that much worse is no one is exactly sure why it happened.

And until investors get some answers, the selling may continue, they say.

“Unless you have a catalyst, ‘cheap’ gets a lot cheaper during a crash in price expectations,” said Keith McCullough of Hedgeye Risk Management. “Old Wall calls it ‘catching a falling knife’ for a reason.”

Gold posted its biggest two-day dollar drop ever and its biggest percentage drop since 1980 when the carnage settled Monday. Prices rebounded slightly in early trading Tuesday. It’s now down 26 percent from its 2011 high.

“We are running out of superlatives to attach to the gold price move since last Friday,” Nomura analyst Tyler Broda wrote in a note to clients. “The rarity of a move like this is notable.”

CNBC

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