Traders build bullish bets on gold

Traders started building bullish bets on gold early Friday, a day after short covering pushed up the price by 1% to Rs 26,900 per 10 gm.

The build-up in intraday bullish bets is borne out by options data on US bourse Comex. At about noon India time, traders on Comex purchased more call options of the $1,200 strike price for June, while open interest in the $1,200 put options declined.

The $1,200 ‘out of the money’ call added 131 contracts against a decline of 46 contracts in ‘in the money’ $1,200 put. The drop may be due to profit booking as the price of the option was up 90 cents. However, the ‘out of the money’ call traded up $2.17, showing relatively greater strength intraday.

The trend was reflected on the futures segment of the Multi Commodity Exchange of India, where the open interest increased to 7,040 contracts intraday from 6,632 contracts on Thursday.

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Posted in: Indian Market Tips