Gold: Recovery rally weakens demand for put options
Gold's recent recovery rally has forced option traders to rethink their bearish bias. The yellow metal bottomed out near $1,515 on March 20 and was last seen trading near $1,650 per ounce, representing a 0.38% gain on the day. Prices hit a high of $1,678 on Tuesday.
With the price rise, one-month 25 delta risk reversals, a gauge of calls to puts on the safe-haven metal, has recovered from the multi-year low of -4.5 to above zero, indicating a bearish-to-bullish change in the sentiment in the options market.
Gold Price Analysis: Price action is tentative at the intraday support zone of USD 1642.00
Gold is trading sideways on Tuesday as equities push higher once again. Today has been one of many COVID-19 headlines and it kicked off with the Eurogroup not being able to agree on a deal to fund relief surrounding the current coronavirus related economic woes. Later in the session, there were some comments from French Finance Minister Le Maire who stated: "there is an agreement with German and other countries that we need an EU fund to finance economic recovery". He then went on to say an agreement is needed within 24 hours and failure is not an option.
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