Pricing the Unthinkable After the Precious Collapse

A violent deleveraging in precious metals triggered by a Fed leadership change has reset market premiums, yet extreme upside call option activity persists.

Key Takeaways

• 1.The recent precious metal collapse was a deleveraging event driven by extreme positioning rather than fundamental changes.
• 2.The appointment of Kevin Warsh as the next Fed Chair reduced 'institutional chaos risk', triggering a reset in monetary-debasement premiums.
• 3.Despite the price drop, extreme upside bets in gold call options (strikes at $10k, $15k, and $20k) saw massive open interest builds.

Table of Contents

• Metal meltdown: an anatomy of a price collapse
• When the music stopped: why prices came crashing down
• Where next? Signals from the tails: option implied bets on commodity extremes
• How to read the charts
• Gold: Fast up, fast down
• Silver: gold on steroids
• LME Copper
• COMEX copper
• Brent oil
• Key insights this week
• TRADING SIGNAL SCORECARD
• SG OVERBOUGHT/OVERSOLD INDICATORS (OBOS)
• FLOW ANALYSIS
• LATEST PUBLICATIONS

Document Preview

Page 1 of 5

Subscribe for full accessStart Free Trial