Gold risk reversals: Bullish bias is strongest since November 2009

Omkar Godbole FXStreet Contributor

Risk reversals on gold, a gauge of calls to puts on the yellow metal, rose to their highest level since November 2009 on Wednesday, indicating investors are adding bets to position for a sustained rally in the zero-yielding metal.

One-month risk reversals (XAU1MRR) are currently trading at 2.375 in favor of call options (bullish bets) - a level last seen in mid-November 2009.

A positive number indicates the implied volatility or demand for call options is higher than that for put options. Put simply, the bullish bias is the strongest in a decade.

Gold is currently trading at $1,344 per Oz, having hit a 13-month high of $1,358 on Friday. More importantly, prices have rallied nearly 6 percent over the last 2.5 weeks.

XAU1MRR

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 trims gains, back below 1.1800

EUR/USD now loses some upside momentum, returning to the area below the 1.1800 support as the Greenback manages to regain some composure following the SCOTUS-led pullback earlier in the session.

GBP/USD off highs, recedes to the sub-1.3500 area

Following earlier highs north of 1.3500 the figure, GBP/USD now faces some renewed downside pressure, revisiting the 1.3490 zone as the US Dollar manages to regain some upside impulse in the latter part of the NA session on Friday.

Gold climbs to weekly tops, approaches $5,100/oz

Gold keeps the bid tone well in place at the end of the week, now hitting fresh weekly highs and retargeting the key $5,100 mark per troy ounce. The move higher in the yellow metal comes in response to ongoing geopolitical tensions in the Middle East and modest losses in the US Dollar.