“A new and important bullish indicator for the gold market is that gold calls are at highs not seen since the October 2008 low as option traders go long gold in the belief that it will go higher.
It suggests that option traders believe that U.S. Federal Reserve Chairman Ben Bernanke will hint at or announce additional money printing and monetary easing at the Jackson Hole, Wyoming, symposium (Friday Aug 31st)
Alternatively, it suggests that they are bullish on gold due to the risks posed to the dollar and the risk of inflation taking off.
Option traders are regarded as savvier and tend to be more sophisticated then the more speculative futures traders.”
Mark goes on to say:
“Bernanke may again obfuscate and not give clear guidance regarding monetary policy and further QE.
However the smart money such as PIMCO’s Bill Gross, Jim Rogers, John Paulson and others believe that further QE and money printing remain inevitable. We would concur and advise investors to fade out the short term noise emanating from Jackson Hole and from assorted policy makers on both sides of the Atlantic and focus on the reality that further monetary easing and currency debasement will continue for the foreseeable future.”