Key Macro Chart: Options trading indicates preference for silver (2024/10/29)
This issue of "Macro Must-See Charts" analyzes the market dynamics of gold and silver. Analysts point out that the price of gold is heading towards the $3500 target, while the rise in US bond yields reflects the market's rejection of interest rate cuts. Russia's foreign exchange reserves are approaching historical highs, and its external debt has dropped to a 12-year low, demonstrating its economic resilience. Options trading shows a preference for silver, especially for upcoming call options. Investors need to pay attention to the volatility risk in the US stock market
Gold Price Expectation
Analyst: From a technical perspective, gold is steadily moving towards its anchor target of $3500 in the cup and handle pattern.
Yield vs First Rate Cut
Analyst: The current U.S. bond yield has seen the largest increase since the first rate cut by the Federal Reserve in 1989. What does this mean? I believe it indicates the market's resistance to rate cut policies.
Russia
With oil prices at $68 per barrel, Russia's foreign exchange reserves have reached or are close to historical highs, while Russia's U.S. dollar-denominated external debt has dropped to its lowest level in over 12 years. Additionally, since October 2022, the production of Russia's key weapon systems has increased by 2 to 6 times.
This doesn't seem like data from a "losing side" in a war. Either Russia's data is all false, or these data are warning Western investors that a major Western narrative is about to fail.
U.S. Stock Market Risks
Investors need to pay attention to volatility risks - the average implied volatility for this earnings season has reached the highest level since the second quarter of 2022.
Options Trading Signals
As shown in the chart below, the bullish performance of gold and silver options indicates a preference for silver. Among the most active options, there are seven call options, especially the December C38 and C40 options expiring in 27 days. On the gold side, some bearish options are starting to appear as traders worry about a potential pullback after hitting record highs.
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