Tags: bold | bets | gold | triple | new york

Bold Bets That Gold Could Triple to $4,000 Trade in New York

Bold Bets That Gold Could Triple to $4,000 Trade in New York
(Baloncici/Dreamstime)

Wednesday, 27 November 2019 11:30 PM

The gold options market saw $1.75 million in block trades betting the precious metal could almost triple in more than a year, surpassing the record.

Around noon in New York Wednesday, 5,000 lots of a gold option giving the holder the right to buy the precious metal at $4,000 an ounce in June 2021 changed hands. The bets were sold at $3.50 an ounce.

“It’s like 18-month term life insurance; what will the world look like if gold is at $4,000,” Tai Wong, the head of metals derivatives trading at BMO Capital Markets, said in an email. “They are hoping for a quick violent move,” he said, referring to the people who bought the call options.

Gold futures climbed to a record $1,923.70 an ounce in 2011 as the Federal Reserve bought more than $2 trillion of debt to stimulate the U.S. economy. While bullion has rallied 14% this year, the precious metal is still 24% below the current all-time high.

Bullion for delivery in February settled at $1,460.80 an ounce at 1:33 p.m. in New York. Futures for June 2021 delivery, which settled at $1,494.40 on Wednesday, will need to almost triple before expiration to make the call options profitable for its holder.

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The gold options market saw $1.75 million in block trades betting the precious metal could almost triple in more than a year, surpassing the record.
bold, bets, gold, triple, new york
204
2019-30-27
Wednesday, 27 November 2019 11:30 PM
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