The price of gold dropped suddenly during US morning trading and swiftly lost almost all the gains it had made since markets opened.
In early morning trading, spot gold made gains of 1.38 per cent, reaching a high of $1,287.86 per ounce. However, within an hour this had swiftly fallen 1.2 per cent, reaching a low of $1,271.18 per ounce, though analysts were left puzzled as there was no clear trigger for the price movement.
"Often when you see gold move like this it's related to something that's happened in the FX or rates markets, but on this occasion it appears to be specific to gold," ICBC Standard Bank analyst Tom Kendall said.
"There's usually a very high intra-day correlation between gold and silver prices so it's not surprising to see silver momentarily dropped as well.
"However, it's still confusing to have seen gold drop like that – the dollar hasn't really moved, the oil price hasn't really moved, so at this stage we're not quite sure what's behind it."
The price of silver, which dropped in tandem with gold, fell from around $17.38 at 10am Eastern Time to $17.15 before 11am (ET).
The price of gold rose around 18 per cent between the beginning of January and mid-March this year, after it reached a low of $1,050 in December 2015.
Listen to the City A.M. Unregulated podcast, Episode 7: Is now the time to invest in gold?