The weakening sentiment can also be seen through the options market where the cost of a 25% delta Call with a three-month expiry over a similar put has fallen to 1%, the lowest since April 2019. Today sees the expiry of December COMEX gold options and before yesterday’s break below $1850/oz, the open interest on puts and calls from strikes $1850 down to $1800 stood above 35,000 lots (35 million ounces) and the mentioned break is likely to have attracted hedging activity from both camps.
Some additional uncertainty was removed late in the day when Trump without acknowledging defeat – which he never will - finally instructed the General Services Administration to begin the formal transition planning.
Responding to these developments, investors pulled another 345k ounces from Exchange-traded fund investments. Thereby taking the total reduction since November 9, when the first vaccine news hit, to 2 million ounces. The aggregate open interest in COMEX gold futures meanwhile rose, a sign of increased short selling activity.