Investors in the U.S. awoke on Monday morning up to find gold prices down sharply. The cause was a two-minute sell-off in Shanghai that saw gold drop more than 4 percent. For now, all available evidence points to market manipulation.

As the Shanghai Gold Exchange opened for business Monday morning, traders faced sell orders for about 33 tons of gold. On a typical day, 16 tons of gold trade on that exchange. The size of the orders indicates this was a sophisticated investor who would understand the impact of their trade on the price of gold. They wanted gold prices to fall.

This sophisticated seller would also have known that markets in Japan were closed for a holiday. Markets in the U.S. and Europe weren’t open yet. Selling 33 tons of gold in two minutes when liquidity is low seems like a calculated move to push the price down.

Given the subsequent carnage in mining stocks, it’s safe to assume miners weren’t behind the manipulation. That points to a hedge fund as the most likely source of the selling. A fund with a large short position in gold could benefit from a decline.

The selling has turned sentiment bearish. Investors are also selling gold ETFs seemingly out of frustration. However, this is probably not the ideal time to rush into the precious metal markets. If the selling is a deliberate effort to push prices down, we could see further declines. Or we could see at least a short period of relative stability in the market as traders look for clues about the direction of the next trend.

If gold recovers to $1,080 or so, it will mean the chart is bullish again from a technical perspective and traders are more likely to be buyers than sellers at that point. Until then, gold offers high risk and relatively small rewards from a short-term perspective.