Gold price consolidation, so far in this year, has struggled amidst the market’s hawkish reconsideration of Fed policy as to how robust the growth and low unemployment have been, and the by-product of this policy amidst growth letting up in the rest of the world – a rallying dollar. A rising US yield curve has also been a dominant issue affecting markets this year. Gold futures for December delivery GCZ8, inched higher today, up about +0.39% on Comex rose $4.79, or 0.5%, to $1,226.12 an ounce, while December silver SIZ8, +1.08% was up 15.6 cents to $14.473 an ounce.
OTC Outlook and Options Strategies:
Bullish neutral risk reversals are observed in gold’s OTC hedging market, while positively skewed IVs of 1m XAUUSD options have been stretched out on either side. This is interpreted as the hedgers bid for both OTM calls and OTM put options.
On hedging grounds, keeping above seesaw hedging sentiments under consideration, ATM straddles are advocated, while the strategy comprises of at the money +0.51 delta call and at the money -0.49 delta put options of 1m tenors at net debit with a view of arresting potential FX risks on either side.
On trading perspective, bidding bullish neutral risk reversals, buying (1%) in the money gold call options are advocated, an in the money call with a very strong delta would move in tandem with the underlying XAUUSD move.
Currency Strength Index: FxWirePro's hourly USD spot index is inching towards 1 levels (which is bearish), while articulating (at 14:16 GMT). For more details on the index, please refer below weblink:


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