Gold Price News and Forecast: XAU/USD recovery rally weakens demand for put options

FXStreet Team FXStreet

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.

AUD/USD consolidates above 0.7000; remains close to monthly top

AUD/USD holds steady above 0.7000 during the Asian session on Friday, trading just below the previous day's monthly low amid diverging forces. A hawkish RBA continues to support the Aussie, while the recent decline in US bond yields keeps the US Dollar depressed near a three-week low. However, oil-driven inflation fears reinforce Fed hike bets, which, along with geopolitical risks, could benefit the safe-haven buck and cap the currency pair.

USD/JPY bounces off one-month low; climbs to 157.00 amid reviving USD demand

USD/JPY rebounds from the 156.00 neighborhood, or a one-month low touched during Friday’s Asian session, with bulls looking to extend momentum beyond 157.00 amid the emergence of some US Dollar buying. Meanwhile, Japan's National CPI rose to a nine-month peak and reaffirmed BoJ rate-hike bets, which could support the Japanese Yen and cap gains for the currency pair.

Gold treads water around $4,000

Gold prices maintain its offered stance in place at the end of the week, hovering around the key $4,000 threshold per troy ounce. The persistent selling bias in the precious metal comes amid decent gains in the US Dollar and an acceptable rebound in US Treasury yields across the curve, all alongside further upside traction in crude oil prices.

Crypto Today: Bitcoin holds the 50-day EMA as Ethereum and XRP face structural resistance

Bitcoin gradually ticks up on Friday, trading above $81,000. The Crypto King has recently defended structural support near $80,000, reinforcing the prevailing bullish outlook. Ethereum similarly edges higher above $2,400, while Ripple trades above $1.32 after testing support around $1.30.

The French bond panic is overdone. Here's what the market is misreading

France's 10-year government bond yield has climbed above 5%, reigniting fears of a sovereign debt crisis in the Eurozone. With public debt exceeding €3.5 trillion, persistent budget deficits and a fragmented political landscape, investors are increasingly questioning the French government's ability to stabilize its finances.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.