Gold one-month risk reversals shed bullish bias

One-month risk reversals show falling demand for XAU calls.
Long-run upside bias intact.

Omkar Godbole FXStreet Contributor

The XAU/USD (Gold) one-month 25 delta risk reversals, which shows the volatility premium for XAU put strikes vs XAU call strikes, fell to zero (neutral) today vs. 0.125 yesterday. The recent high of 0.40 was seen on Feb. 14.

The decline from 0.40 to 0.00 indicates falling implied volatility premium for XAU calls (buy gold) over XAU puts (sell gold). So, the options market has shed short-run bullish bias on gold.

That said, the long-run bullish outlook is still intact. The one-year 25 delta risk reversals are being paid at 0.65 XAU calls vs. January low of 0.0. The recent high was 0.70 XAU calls.

Author

Omkar Godbole

FXStreet Contributor

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

GBP/USD gains as easing Fed hike bets weigh on US Dollar

GBP/USD continues its winning streak for the ninth consecutive day, trading around 1.3390 during the Asian hours on Tuesday. The currency pair rises as the US Dollar faces headwinds as market participants scale back expectations for Federal Reserve rate hikes this month and in September.

EUR/USD eases toward 1.1400 as Hormuz risks support USD

EUR/USD is easing toward 1.1400 in European trading on Tuesday, facing rejection at the 1.1450 level. The pair loses ground amid a modest recovery in the safe-haven US Dollar, as renewed tensions in the Strait of Hormuz and Asian tech sell-off fuel risk aversion.

Gold sticks to losses as inflation fears lift US bond yields and USD amid Hormuz risks

Gold maintains its offered tone heading into the European session, albeit it holds above the $4,100 mark. Crude oil prices edge higher amid renewed tensions in the Strait of Hormuz, reviving inflationary concerns. This, in turn, triggers a fresh leg up in US Treasury bond yields, offering some support to the US Dollar, and weighing on the non-yielding yellow metal for the second straight day.

Bonk extends correction after $20 million hack from BonkDAO treasury

Bonk remains under pressure, trading below $0.0000044 after losing over 10% in the previous day. Monday’s correction occurred as Bonk Decentralized Autonomous Organization announced a governance exploit that resulted in the theft of $20 million worth of BONK tokens from its treasury.

Bye, forward guidance: How to trade when central banks choose silence

Central banks have spent years telling markets what might come next. Now, traders face the possibility that they say a lot less. From the Federal Reserve to the European Central Bank and the Bank of England, policymakers are pushing back against forward guidance, arguing that the current world demands more flexibility.