Gold options tilt bullish as traders buy 8,000 November 460 SPDR Gold Trust calls

Gold options markets have turned more bullish as investors pay more for upside exposure than for downside protection while the metal recovers from a sharp summer slide. Susquehanna said one-month implied volatility remains near recent lows even as skew has swung toward calls, reversing the earlier summer pattern when downside put protection was relatively richer. Chris Murphy, co-head of derivatives strategy at the firm, highlighted a purchase of 8,000 November 460 calls on the SPDR Gold Trust at about $5.55 and roughly 25,000 September 350 puts at $0.62, showing that upside demand has strengthened even though hedging remains active. Gold fell for four straight months from March through June, dropping more than 25% as U.S. strikes on Iran lifted oil prices, fueled inflation concerns and pushed up Federal Reserve rate-hike bets and real yields, but the metal gained about 2% in July, drew $3 billion into gold ETFs after two months of outflows, and has risen more than 8% in August to trade back above $4,300; traders now see coming Fed meetings as key to whether the rally extends.

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