Spotted, the once in a 2 million year ‘Golden Swan’? | FT Alphaville

Spotted, the once in a 2 million year ‘Golden Swan’?

A quick update on gold, which hit a fresh daily low of $1355.80 on Monday afternoon, London time.

According to John Kemp at Reuters that puts us way past the six sigma mark at this point:

But as he adds in commentary that’s only if daily price changes followed a normal distribution:

Plunging gold prices have initiated a cross-commodity sell-off that has spread across energy and industrial metals. But so far the most dramatic declines have been concentrated in gold. By 14:49 GMT, front-month futures <GCc1> had fallen more than 8 percent compared with Friday’s close, more than 6 standard deviations (Chart 1). Gold is among the deepest and most liquid commodity markets, trading more like a currency or a financial asset than an industrial raw material, so such large movements are highly unusual. If daily price changes followed a normal distribution, a move of 6 standard deviations or more would only occur roughly once in every 500 million trading days, about once every 2 million years.