Unusual Options Activity In SPDR Gold Shares ETF ,GLD

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2020 has ended and gold posted it biggest annual gain in a decade after a tumultuous year. After hitting a record in August, all the talk has been Bitcoin taking market share from Gold. But the facts remain, we still have massive COIVD-19 issues. For example, as of today there are only 27 ICU beds in all of LA County and that county has 10 million people.

We also have every central bank and government around the world printing fiat with more stimulus to come over the next sevearal months. The end result is a lower US dollar, because it's not backed by anything.

So as we begin a new year, Gold is off to a great start and quickly approaching the $2000 level. And the technicals are now supporting the fundamentals as Gold just broke out from a downward channel on the daily chart.

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"Since gold reversed course from below $1,900, this is mainly a reflection of a weaker U.S. dollar ... a very fertile backdrop for gold and based on that we've also seen some trend followers and technical traders coming back into the market, extending this rally," said Julius Baer analyst Carsten Menke.

GLD is the SPDR gold ETF with the objective of the Trust to try and reflect the performance of the price of gold bullion by holding gold bars and issuing Baskets in exchange for deposits of gold and distributes gold in connection with redemptions of Baskets.

Today, the Smart Money bought over 55,000 call options with a strike price at $185 that expires next week.

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GLD is trading at $182, so it only has to move up a bit more than $4 for the Smart Money to be in the money. Based on the rapid upward movement in gold prices his week, the Smart Money just might be right...once again.

This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.

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8 comments
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When you say the central bank and government are printing more fiat, Why is this? Is there a need to do so? I thought the economy probably enjoys a little stability, from this now, people who store value in things like gold rather than the dollar then are making a wise choice

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COVID-19 has stunted growth, injecting fiat into the system is like drinking a caffeinated beverage.

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Investing in gold seems to be very profitable.

I know practically nothing about it, but the numbers look attractive (at least for Brazilian investors).

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I agree with your assessment. To add to it appears to be a call vertical spread since 193 strikes expiring same week had over 44k contracts traded today. Nice way to capture upside is to take some vertical calls two to three months out at 185/195. 185 is a crucial resistance and if GLD can break it then decent run up.

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