Shock and Awe

Abstact

Shocks are an essential methodological feature of the gold market interventions. Not every intervention is abrupt – there are also many others, such as limiting advances in intraday trading. Nevertheless, surprising, fast price declines are among the features that characterise the interventionist practices in the gold market. The aim of this intervention method is to scare investors and interested parties off. They are supposed to refrain from entering the market. The method has been discussed several times already; now follows some supplemental information. The following example (Figure 23.1) is well suited to illustrate the effects of such shock-like movements.