Gold outperforms fair value by 10% as investor interest surges
Gold has outperformed its fair value by approximately 10% over the past month, climbing about 11% during this period.
This level of outperformance has been surpassed only 1% of the time in nearly 30 years, dating back to February 1997, according to market data.
The SPDR Gold Trust ETF currently tops the Bullish Sentiment screen, having accumulated approximately $4 billion in assets under management over the past two weeks. This represents about 3% of its overall AUM.
This significant inflow has been exceeded only once in the past 20 years, which occurred in February 2009.
Market analysts note that given the rich volatility and deviation from fair value, investors looking to express an upside view but expecting a more gradual rally might consider options strategies like call spreads or call spread collars rather than outright calls.
One example suggested is buying GLD 365/390 December 2025 call spreads for approximately 1.6% with a maximum expiry payout ratio of 4.2.
Source: Investing.com
