Yesterday, just before the Chinese market opened, precious metals but mostly gold, flash crashed in milliseconds with a violent urgency never before seen. We documented the unprecedented event last night, but for those who missed it, the following chart from Nanex clearly lays out just how sudden the “out of nowhere” selling was, which led to not one but two 20-second halts in the gold futures market spaced out precisely 30 seconds apart as a result of a Velocity Logic (or lack thereof) event.

For those following the gold market, last night's event was not surprising: after all just on this website we have documented at least three occasions when furious algorithmic gold selling broke the gold futures market for at least 10 seconds, to wit:

What was most notable about the last “velocity logic” gold slamming event is that, as we predicted in January 2014, it was due to a stray and premeditated algo. The CME confirmed just that one month ago when it charged the futures trader whose trading software broke the market and led to that particular violent crash:

Pursuant to an offer of settlement Mirus Futures LLC (“Mirus” or the “Firm”) presented at a hearing on June 16, 2015, in which Mirus neither admitted nor denied the rule violations upon which the penalty is based, a Panel of the COMEX business Conduct Committee (“BCC”) found that it had jurisdiction over Mirus pursuant to Exchange Rule 418 and that on January 6, 2014, Mirus failed to adequately monitor the operation of its trading platform (Zenfire), and connectivity of its trading system (Zenfire) with Globex. This failure resulted in unusually large and atypical trading activity by several of the Firm's customers and caused the mass entry of order messages by Zenfire, which resulted in a disruptive and rapid price movement in the February 2014 Gold Futures market and prompted a Velocity Logic event.

The Panel found that as a result, Mirus violated Rules 432.Q. (Conduct Detrimental to the Exchange) and 432.W. (Failure to Supervise).