Gold risk reversals adopt a bearish bias

Omkar Godbole FXStreet Contributor

Gold's decline from near $1300 levels to $1282 yesterday pushed the risk reversals gauge into the negative as expected.

Risk reversals

The one-month 25 delta risk reversal fell to -0.125 yesterday. The negative number indicates XAU (gold) put options are in demand.
The technical exhaustion near $1300 followed by a drop to $1282 levels, coupled with negative risk reversals indicates the tide may have turned in favor of the bears.

As of writing, gold is flatlined at $1284 levels. A better-than-expected US core PCE could yield a sell-off to the 200-day MA located at $1267.

Author

Omkar Godbole

FXStreet Contributor

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

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