Topped out? Value of gold calls has backed off from eight-month highs

Gold one-month 25 delta risk reversals (XAU1MRR) are currently trading at 1.7 in favor of calls, having hit an eight-month high of 2.2 on Dec. 27.

The pullback from 2.2 to 1.7 represents a drop in the implied volatility premium or demand for gold calls (bullish bets).

Simply put, the investors are no longer adding bets to position for further strength in the safe haven yellow metal.

Notably, the data validates the bearish outside-day charted by gold on Friday.

XAU1MRR