As the second half of 2016 began today on July 1, gold moved up and continued the trend set back in early January of this year. In fact, with the gold price closing up over $20 to end the week at $1342.90, it solidified the bull trend upward and closed out above four year old resistance levels.
Gold futures continue to see more inflows as we start the second half of the year. Both technical buyers and hedge funds put new money to work in a busy pre-July 4 Friday.
We had been worried about about a rally in gold futures causing a rush for a wing vol, a way out of a call with high volatility. The upward spike in gold futures prices on Friday (to a high of $1,344.30 for the August contract traded at the Comex) kept implied volatility of options muted as some market participants sold call options against the underlying length. That meant that traders sold calls against futures that they already purchased
Futures contract trading volume on the Comex on Friday was equivalent to 20 million ounces, and volume in front month call options are picking up.
The GCQ $1360 calls have been the main option interest with close to 2,000 contracts being bought and sold down .5% vol. - The Street