Gold Price Forecast: Short-term bearish bias as Put option OI spikes

Omkar Godbole FXStreet Contributor

Gold prices have dropped nearly $20 this week and the data published by the CME for Gold October expiry options suggests the losses could be extended further to $1260-1250 levels.

Gold OGX7 Open Interest Change: Current (Oct 16 - Prelim) vs Oct 13

Call Summary
Total		ITM		OTM
OI	Chg	OI	Chg	OI	Chg
106,043	-1,510	18,035	-120	88,008	-1,390

Put Summary
Total		ITM		OTM
OI	Chg	OI	Chg	OI	Chg
77,712	1,605	7,732	-11	69,980	1,616

The open interest/open positions in call options fell by 1510 contracts on Monday and the open positions in put options jumped by 1605 contracts
Clearly, the bearish investors not only squared off bullish bets (call options) but also boosted bearish bets (put options)

Gold OGX7 Open Interest Change: Current (Oct 16 - Prelim) vs Oct 9

Call Summary
Total		ITM		OTM
OI	Chg	OI	Chg	OI	Chg
106,043	1,294	18,035	89	88,008	1,205

Put Summary
Total		ITM		OTM
OI	Chg	OI	Chg	OI	Chg
77,712	3,315	7,732	87	69,980	3,228

Over the last one week, the open positions in put options have gone up by 3315 contracts, while the open positions in calls have improved by 1294 contracts.
Again, the bias is bearish
It also indicates the investors lacked trust in the gold rally from $1283 (Oct 10 low) to $1306 (Monday's high).

Daily chart

Lower high at the 50-DMA hurdle
Stochastic has turned bearish
RSI favors the bears

View

Gold could re-test the 100-day moving average lined up at $1277 and may extend losses to $1260 (recent low). On the higher side, an end of the day close above $1306 (Monday's high) would revive the bullish move.

The long-run outlook remains bullish as discussed below:

Fed Review: Balance sheet taper is good news for Gold

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.