Gold has enjoyed a wild ride so far in 2019, closing out 2018 at just under $1,300 per ounce and reaching a high of just over $1,550 per ounce at the start of September. Gold’s price ended the week of November 8 just above $1,460, but by late morning on Monday gold was down under $1,450 to its lowest level since August. The good news for gold bugs is that the selling looked swift and temporary, but the bad news is that some gold traders may start to worry about what happens if a big seller or a group of large sellers simultaneously decide to unload gold.

On Monday morning, there was a large dip based on the equivalent of 3 million ounces of gold trading hands in a very short time. More than 33,500 gold contracts traded hands, three times larger than the average during the ups and downs seen in the past three months when gold was already volatile.

Without being in on the trading, it’s going to be a while before anyone knows who the seller (or group of sellers) was. That said, in the world of computerized trading, the moves in and out of commodities, stocks and bonds can be swift and violent, depending on when the flood of order occurs.

In the past, India was frequently cited as responsible for such moves as its central bank made changes to its gold holdings when the main U.S. market participants were all still asleep.

There was recently a boost in commitments of traders in the Commodity Futures Trading Commission, showing that hedge funds had increased their bets against gold last week to 31,111 contracts (up 5,155 contracts from the prior week) from the “Managed Money” category that includes hedge funds. That’s still very low to the long positions, which rose by 1,539 contracts to 261,595, but it’s a large enough of an increase against long positions to stand out.

Where things get interesting is that the SPDR Gold Shares (NYSEARCA: GLD), the world’s largest gold exchange-traded product by far, did not participate in the move in the same extreme volume. Its price adjusted with gold lower, but even as of noon Eastern Time, its shares had barely traded 4.1 million shares, versus about 10.5 million shares on an average day’s volume.

Trading the equivalent of 3 million ounces of gold in the futures market would be the equivalent of $4.35 billion rounded at $1,450 per ounce and then leveraged out to the full value of the underlying gold. The SPDR Gold Shares total day’s volume was worth closer to $562 million, all in.

As gold recovered to $1,455, it seems that the market is willing and able to stand up to selling pressure. That said, even after the interest in gold that was brought on by uncertainty and trade wars (and those pesky negative interest rates) still makes the case that if a central bank needs to raise cash via gold sales, it better take measured selling steps if it doesn’t want to create disruption in the gold market.

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