Summary

Bullish bets in the gold market are clearly heating up. According to Goldman Sachs data, over the past three weeks, speculative funds have cumulatively purchased approximately $22.2 billion in gold futures, marking the largest buying spree in more than a decade.

At the same time, demand for gold ETF call options has also surged rapidly. The difference between open interest in call options and put options has reached about 2.4 million contracts, the highest level since February this year. Since Japan intervened in the currency market three weeks ago to support the yen, this difference has increased by about 1 million contracts; and after the U.S. Treasury announced an expansion of its long-term Treasury repurchase program, the growth in bullish positions accelerated further.

It is noteworthy that this indicator has now reached about . A similar extreme bullish structure appeared earlier this year in January and February, when net call option open interest once reached about 2.8 million contracts, followed by gold prices breaking through $5,500 per ounce for the first time.

KTX Crypto Portfolio Observation

For the KTX Crypto portfolio, what is more noteworthy about this data is the "crowding back into gold as a safe-haven trade". The focus is not simply on how much gold prices might rise, but on whether funds are further shifting from other risk assets into gold:

• Speculative funds have clearly increased their positions: About $22.2 billion in gold futures bought over three weeks shows a rapid warming of short-term capital bets on gold.
• Options market also leans bullish: The difference between call and put option open interest has reached about 2.4 million contracts, with bullish demand clearly exceeding the average levels of recent years.
• Macro factors are strengthening gold trading: Following yen intervention and the expansion of the U.S. long-term Treasury repurchase program, bullish positions have increased further, reflecting heightened sensitivity of funds to exchange rates, interest rates, and macro uncertainty.
• Crowding risk also needs attention: Current bullish option positions have reached about three times the 2021–2024 average level, indicating that while gold is strong, trading is becoming more crowded.
• Portfolio execution: Gold can still serve as an important indicator for observing global safe-haven flows, but it is necessary to simultaneously monitor the U.S. dollar, U.S. Treasury yields, real interest rates, and option position changes. If bullish positions continue to rise rapidly but gold prices fail to make new highs in tandem, one should be wary of pullback risks due to crowded trades.

Original Text Included

Investors Betting on Gold Are Still Increasing

Goldman Sachs data shows that over the past three weeks, speculative funds have collectively purchased a record $22.2 billion in gold futures, the largest buying wave in more than a decade.

At the same time, the difference between open interest in gold ETF call options and put options has risen to about 2.4 million contracts, the highest level since February this year.

Since Japan intervened in the currency market and supported the yen three weeks ago, this difference has increased by about 1 million contracts.

Last Wednesday, the U.S. Treasury unexpectedly announced it would double the planned repurchase size of long-term Treasuries. Since then, the growth of gold bullish positions has accelerated further.

From a historical perspective, the current net call option open interest of about 2.4 million contracts has already exceeded three times the 2021–2024 average level of approximately 800,000 contracts.

Between January and February this year, the market also saw a similar surge in call option demand. At that time, net call option open interest once reached about 2.8 million contracts, after which gold prices broke through $5,500 per ounce for the first time.

This data indicates that current market bets on gold are no longer just about spot or ETF inflows; long positions in futures and options markets are also rapidly increasing in tandem.

From one perspective, this shows gold still has strong capital demand; but from another, when bullish positions are significantly above historical averages, it also means trading is becoming increasingly crowded.

Therefore, beyond watching whether gold can continue to make new highs, a more important question is:

If bullish positions keep increasing, can gold prices maintain the same upward momentum?

If positions continue to grow and prices rise in sync, it means the trend is still confirmed by capital; but if positions become increasingly crowded while gold prices start to stall, the risk of short-term pullbacks may also rise.

Original Author: AB Kuai.Dong

X Account: @_FORAB

Original Link: https://x.com/_FORAB/status/2092090551097311445 

Risk Disclaimer: This article represents community views and does not constitute any investment advice. DYOR (Do Your Own Research).