Last night was something to behold during the Asian session. The volatility was notable in equity futures, in tech in particular, but it was extreme in the precious metals space. Here’s Peter Boockvar’s take:

“It was a wild Sunday night in the precious metals markets, or we can just call it another flash crash. Someone around 7pm est last night decided to puke gold down to $1678. Silver got as low as $22.30. The trade with gold and silver is pretty straight forward here.”

His conclusion in terms of what it portends given the potential for Fed policy going forward was spot on:

“If you believe the Fed will get ahead of the curve or at least in line with it with regards to inflation, then sell. If you think the Fed will crab walk their tightening, then this selloff is a gift. I believe in the latter.”

The latter — if not even more benign than a “crab walk” — is a virtual no-brainer. Of course the action in precious metals — as in any market — is influenced by many factors, Fed policy of course being a big one…

He goes on to remind us of gold’s response to previous Fed crab walks:

“Just a reminder, when Greenspan was lifting rates off 1% on towards 5.25% in the mid 2000’s, the price of gold doubled. When Yellen started raising rates in December 2015 after 7 years at zero, gold bottomed. I know we are not debating rate hikes now, but rather the timing and pace of tapering but you get the point.”

Again, the fact that a dovish Fed has been historically good for gold (seeing it double, then signaling the end of a bear market in the metal) in no way makes it the only consideration, just a big box to check, that’s all…

About last night, somebody, somewhere, placed an order to sell $4 billion worth of gold at the market. Folks, that doesn’t happen outside of a forced sale (say, a margin call), never, as the $100 freefall in the price per ounce illustrated.

Take a look: