Gold Price News and Forecast: XAU/USD bullish bets in demand amid risk-off
|Gold: Bullish bets in demand amid risk-off
Bullish bets or call options on gold are drawing bids, according to risk reversals, a gauge of calls to puts on the safe-haven metal. One-month risk reversals (XAU1MRR) rose to 2.725 on Thursday to hit the highest level since Jan. 6, having bottomed out at 0.85 on Feb. 12.
The near-90 degree surge seen over the last two weeks indicates a rise in demand or implied volatility premium for call options – a sign investors are expecting gold to rise on coronavirus-led risk aversion in the equities and are adding bets to position for gains in the yellow metal.
Gold Price Analysis: XAU/USD can be at risk of correcting down further
XAU/USD is trading in an uptrend above the main daily simple moving averages (SMAs) as the market is trading in seven-year’s highs.
Gold has been easing from the 2020 top while trading above the main SMAs on the four-hour chart. While the trend is bullish a deeper correction down cannot be ruled out. A daily close below the 1638 support can lead to further retracements down towards 1627.86 and 1622.74 levels. Resistance can be expected near the 1650.00, 1655.00 and 1661.00 levels
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