The gold price has soared in recent weeks as investors seek safe-haven assets during Russia’s invasion of Ukraine. Additionally, gold seems to be offering some investors a place to hide as inflation continues to spiral out of control and there are no signs of a decline. Investment expert Michael Kramer states that the uncertain outlook and strong inflation rates are causing some traders to bet on the SPDR Gold Trust ETF (GLD), which indicates that gold prices will rise even higher in the next few weeks. Michael Kramer’s own narrative of gold price forecasts and metrics-based analysis cryptocoin.com We have prepared for our readers.
Bull bets: Gold price may not stop at $2,000
Gold has undoubtedly debuted technically and is close to breaking its all-time high of $2,100. After a massive rally that started in 2018, the price of gold has consolidated horizontally since peaking in late 2020. However, the precious metal has broken out of a major bear trend that has offered strong resistance for several months. Finally, the gold price managed to break above this trend in mid-February.
The relative strength index is also rising steadily. This shows that the momentum of gold has changed more positively in recent weeks. While the current RSI level indicates that the yellow metal is currently overbought, it also indicates that the strong bullish trend of gold should continue in the long term.
As long as inflation rates remain high and uncertainty persists in Eastern Europe, gold is likely to continue to see an offer. However, if uncertainty in Eastern Europe eases and central bank monetary tightening begins to dampen inflation, the outlook for gold could change very quickly.
What do the developments in the SPDR Gold Trust ETF point to?
Options trading on GLD has seen an uptick over the past few trading sessions. The data shows that the calls are part of a spread and traders pay $0.73 per contract to establish a bullish position. It shows that GLD was trading above $235 until June but remained below $250. This will be a significant gain over the next few months for the GLD from its current price of roughly $187 on March 10.
Then on March 9, open interest for March 31, $190 calls and $200 calls increased by nearly 44,000 contracts each. The data shows that traders paid around $3.30 per contract to generate this bull spread. This means that GLD is trading above $190 by the end of March but remains below $200. For traders to make a profit, GLD needs to rise above $193.30, assuming contracts are held until expiration.
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