By: Tim Lacono | October 2, 2013

Precious metals are staging an impressive rebound today after yesterday's drubbing that, once again, was initiated by a massive sell order that caused prices to plunge and stop loss orders to be executed, exacerbating the decline.

This came at the market open, after the government had shut down at midnight the night before, and was not the response that most gold (GLD) investors expected. For reasons detailed here a week ago, a government shutdown and a looming debt ceiling crisis should clearly have been bullish for gold, but that was not the case yesterday in the opening minutes of trading.

Frank Tang at Reuters reported that "an unusually large trade in the New York futures market" played a key role in the early morning carnage yesterday as depicted in red in the Kitco graphic below.