CNBC’s intrepid Eamon Javers just tweeted this a few minutes ago. It shows three quick burst of gold trades, all downward movements, taking place 62 milliseconds before the release of the jobs numbers at 8:30 this morning.
I’m not sure what to make of it, but it looks an awful lot like some gold traders have found a way to get the jobs number at 8:29:59:838. The better-than-expected payroll number led them to short gold which is down 2.4% so far today. There could be other explanations, but I can’t think of them.
Can you?
Source: Eamon Javers, CNBC
Update: Here’s a Javers piece from earlier this week about a similar mishap involving millisecond trading advantages caused by clock synchronization issues…fascinating and problematic stuff at the cutting-edge intersection of information delivery and automated trading.
happens all the time…zero hedge documented that someone had the ISM manufacturing data milliseconds before the surprise negative 49.0 print…
Yes and here it is in all of it’s glory and people wonder why the little people have gotten out of the casino market place.
http://www.zerohedge.com/news/2013-06-07/here-todays-482-millisecond-nfp-leak-and-subsequent-gold-slam-and-trading-halts-trea
It just so happened some got a head start what surprise;)
Would be helpful to have more than 2 seconds of data to know whether or not this is actually just normal flux.
Could be that the gold traders were actually reacting to other market activity. In other words, the leak might have been to folks in the bond, oil, interest rate, securities, etc. markets who initiated trades in response to leaked information. The automated systems that trade gold might have been responding to what they observed elsewhere.
Rather than someone getting information a few milliseconds ahead and being able to react to it, it seems more likely that someone has figured out how to falsify the time stamp on their trades.
So, to prevent this sort of thing, maybe release such information on a Sunday? Would that help?
what do we need, statistically, to make sense of this ?
thre are probably 100 markets like gold, and probably 50-100 news announcements per week
to the probability of something odd, just by chance, is quite high
at a minimum, you need to look at gold trades for the last month or so..