Spot Gold Price Breaks $4,400! Susquehanna: Options Buying Turns Bullish, Capital Flows Back

Gold has recently rebounded, and quantitative trading firm Susquehanna International Group says options investors are paying higher premiums to participate in further price gains.

Chris Murphy, Co-Head of Derivatives Strategy at Susquehanna, noted that while gold prices are rising, the one-month implied volatility remains near recent lows. This allows investors to increase their gold exposure without paying a higher implied volatility premium. At the same time, gold is seeing a fresh wave of capital inflows.

Murphy cited a recent trade where approximately 8,000 November-dated call options on the SPDR Gold ETF (GLD-US), with a strike price of $460, were bought for about $5.55. The ETF closed at $405.49 on Monday.

Murphy emphasized that changes in skew—measuring options demand across different price points—are playing a particularly critical role.

"The skew in gold has clearly shifted from downside puts to upside calls, reversing the pre-summer structure where protective puts were relatively expensive. This shift is already reflected in recent capital flows," Murphy said.

He also referenced a recent transaction buying around 25,000 September-dated put options with a strike price of $350 at $0.62, as an example of "taking advantage of cheap downside protection." Susquehanna added, "Capital flows are also supporting the market environment, with gold funds seeing their strongest inflows since January."

Spot gold prices closed above $4,400 per ounce on Monday (17th). As of Tuesday’s deadline, prices were down but still held above $4,400.