A second sharp jolt in gold prices in two days drew speculation someone seeking to reverse an erroneous trade on Monday again managed to unsettle the market.
Prices spiked in early European trading with about 815,000 ounces of gold bought in five minutes. That erased most of gold's losses the previous day, when 1.8 million ounces of the metal were sold in a single minute.
"You will never have all the info, but the price behavior provides enough clues," said Georgette Boele, a currency and commodity strategist at ABN Amro Group NV in Amsterdam. "If there was a fat fingers incident, you may have to try to get the metal back at roughly same levels."
Monday's slump halted near the key 200-day moving average, a positive sign for gold, Boele said. "This morning prices are edging back to levels seen before the sharp selloff," she said. "Like it never happened."
For a recap on yesterday's price action, click here
Conjecture over the movements provides light relief for traders and analysts amid a market dogged by low volatility lately. A gauge of price swings fell in April to the lowest in more than a decade, and has held there despite rising U.S. interest rates. Gold for immediate delivery rose 0.2 per cent to $1,247.58 an ounce by 11:16 am in New York.
"That last blip was probably the last desperate buyback," David Govett, head of precious metals trading at Marex Spectron Group in London, said of Tuesday's early spike. "If they had any sense at all, they would have attempted to buy it all back quietly."
In other precious metals Silver for immediate delivery was little changed at $16.630 an ounce. Platinum rose 0.4 per cent to $921.39 an ounce. Palladium traded down 0.6 pe rcent at $866.05 an ounce.