Gold surged more than 11% from February 4 to February 7, 2000.
By early 2000, some of the gold miners started to realize that gold was coming out of its multi-decade bear market. Gold miners typically hedge future production by selling gold (hedging) in the futures market. That way they can lock in the current price for any gold that they produce in the future. This protects their mining operations from any downturn in the price of gold.
On February 7 (a Monday), Placer Dome (a big Canadian gold miner) announced that it would no longer hedge its gold production. Someone clearly knew about this beforehand, because gold soared on February 4 (a Friday). It is not illegal to trade on insider information in the commodities market. On February 11, Barrick Gold (another Canadian gold miner) also announced that it would no longer hedge its gold production. Gold rallied again for a day, but it was not able to make a new high.
It’s worth mentioning that this spike retraced 61.8% (Fib retracements) of the post-September 1999 spike’s decline.
On an interesting side note, Placer Dome was acquired by Barrick Gold in 2006.
We have no idea why gold spiked again from May 15 to May 21, 2001. Some traders attribute this spike to the South African Rand’s (their currency) massive devaluation in 2001. They say that this meant South Africa, which is a major gold exporter, would supply less gold. We have no idea if this is the real reason or not.
Currently, this reason does not seem plausible. Although South Africa’s currency had been going down for several years from 1998 to 2001, the real decline in its currency began in late-2001 (specifically in December 2001). This was half a year after gold’s spike in May.