Gold takes a turn for the better
Goepfert: Institutional traders in ‘mad scramble for protection’ against a stock market crash

(USAGOLD โ€“ 9/9/2022) โ€“ Gold took a turn for the better this morning as markets sidestepped the hawkish tone from key global central banks, the dollar turned sharply lower, and traders shifted attention to next week’s US inflation numbers. It is up $12 at $1722.50. Silver is up 11ยข at $18.73. The consensus forecast for Tuesday’s report is an 8.1% headline inflation rate โ€“ well-below July’s 8.5% reading but still considerably higher than the Fed’s 2% target. The S&P 500 is down over 15% year to date (compared to gold’s -4%). SentimenTrader’s Jason Goepfert says institutional stock market traders are suddenly in a “mad scramble for protection.”

“In February 2021,” he reports in a client update released yesterday, “small speculators were going bananas. At the time, we showed what was perhaps the most remarkable chart that we’d seen in our entire careers. Until now… This time, it’s not small options traders that have panicked. And it’s not FOMO that’s causing it. Rather, it’s the largest traders in the market, and they’re buying protection against a crash at a pace unlike anything the market has ever seen. Last week, traders of fifty or more contracts bought to open nearly five million put options. More importantly, they spent a whopping $8.1 billion on those contracts. That is almost double the amount of any other week in 22 years.”

line chart showing massive put options among instiuttional traders
Chart courtesy of SentimenTrader/Jason Goepfert

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