Options investors are increasingly paying for gold upside rather than downside cover, according to Susquehanna, with one-month implied volatility on the metal sitting near recent lows.
This marks a major turn from the summer, when put protection carried a richer price.
Gold Erased Its 2026 Gains Before July Turned Green
Gold closed March, April, May, and June in the red. The metal shed more than 25% over that stretch, wiping out its gains for the year.
US strikes on Iran lifted oil prices and stoked inflation worries. This pushed Federal Reserve rate hike bets higher, and higher real yields hurt an asset that pays no yield.
July then broke the streak with a gain of roughly 2%. Gold ETFs added $3 billion that month, ending two months of outflows.
August has extended that recovery. Gold has climbed back above the $4,300 level. It has gained more than 8% so far this month.
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Skew Flips Toward Calls as Volatility Stays Cheap
The options market has repriced alongside the rally. Chris Murphy, co-head of derivatives strategy at Susquehanna, pointed to a purchase of 8,000 November 460 calls on the SPDR Gold Trust at roughly $5.55. The fund closed Monday at $405.49, leaving it about 13% above the market.
“Skew has shifted materially away from downside puts and toward upside calls, reversing the earlier summer setup when put protection was relatively richer; that shift has already shown up in recent flow,” Murphy said.
Skew, which measures the relative cost of puts versus calls, has shifted from downside protection to upside participation.
Still, hedging has not disappeared. Traders bought around 25,000 September 350 puts at $0.62, a modest premium to cover roughly 14% below the price.
Whether the call buying pays off may depend on the Fed meetings. A confirmed pause would likely validate the upside bets, while a hawkish surprise would leave those November strikes stranded.
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