Gold risk reversals hit 4-month low on rising demand for put options

Gold risk reversals fell to 4-month low on Monday, indicates strong demand for put options.
Adds credence to gold's drop to 2018 low of $1,236 on Friday.

Omkar Godbole FXStreet Contributor

Gold one month 25 delta risk reversals (XAU1MRR) fell to -0.475, the lowest level since March 21, indicating the demand for put options is strong.

A week ago, risk reversals were flashing positive at 0.10, meaning the implied volatility premium (or demand) for gold calls was higher than that of put options.

However, the sentiment has taken a turn for the worse in the last seven days, the negative risk reversals indicate. This does not come as a surprise as the yellow metal fell to a 2018 low of $1,236 on Friday.

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.

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