economy
Gold bugs spend $180 million betting all's clear for metal as bond yields stall
Despite a 25% decline in gold from its high in January, proponents of the precious metal are storming into bullish call positions.
TL;DR
- Gold proponents are investing heavily in bullish call options for gold ETFs (SPDR Gold Shares) and miners (GDX).
- This follows a 25% decline in gold prices from its January high, with recent sideways action giving way to a rally.
- Investors are betting on a market shift as Treasury yields stall and the dollar weakens.
- Aggressive call-buying occurred after weak U.S. jobs data, which may bolster dovish sentiment at the Federal Reserve.
- Foreign buyers, specifically Chinese individual investors in domestic gold ETFs, appear to be a significant catalyst for the recent price move.
- The buying by Chinese investors is potentially linked to Beijing's efforts to restrict capital outflow.