Gold risk reversals show put bias is strongest since March 20

Gold (XAU/USD) risk reversals show demand for put options (sell gold) continues to rise.

Omkar Godbole FXStreet Contributor

The one-month 25 delta risk reversals (XAU1MRR) are being paid at 0.525 XAU puts - the level last seen on March 20. About two weeks ago, the risk reversals were flashing a strong XAU call (bullish) bias and were being paid at 1.05 XAU calls.

The options data add credence to the drop in gold to a seven-month low of $1,238 and indicates the investors are likely expecting a further drop in the yellow metal.

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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