Gold Options: Breaking Out of the Doldrums

In the one-and-a-half months after the U.S. elections on November 8, gold prices plunged 12% on the assumption that the incoming president’s fiscal stimulus would boost the economy and lead to higher interest rates.  However, with the Trump agenda running into numerous roadblocks since then, the yellow metal has rebounded, recouping nearly all its post-election losses.  Gold options, meanwhile, have perked up from their recent lows, but with implied volatility at less than 14% they remain historically inexpensive (Figure 1).  A podcast on this topic can be found here.



by Erik Norland via AllFeaturedReports RSS


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