Gold, Geopolitics, and the Macro Chessboard: Why Puts May Shine Now
The past weeks have seen gold in EUR terms (XAU/EUR) surge parabolically from below 3,200 to above 3,700, before reversing sharply lower. Technicals are stretched, with RSI in overbought territory and candles signaling possible exhaustion. Traders are asking: is this the moment to bet against gold’s relentless rise?
Geopolitical Catalysts
Several key events are converging over the next two weeks:
- Trump–Putin Summit in Hungary: Following August’s unproductive Alaska meeting, Donald Trump and Vladimir Putin are scheduled to meet in Budapest within the next 7–14 days. A constructive outcome, such as a pathway to ceasefire talks with Ukraine’s President Zelensky, could significantly reduce geopolitical risk premia. For gold, less “fear” typically equals lower prices.
- US–China Trade Talks: US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng have announced renewed trade negotiations in the coming week. Risk-on sentiment from this narrative would further reduce safe-haven demand for gold.
- France’s Credit Downgrade: In contrast, S&P’s unexpected downgrade of France highlights fiscal fragility within the Eurozone. This introduces a counter-current: localized risk aversion that could provide some support to gold priced in EUR.
Technical Picture
- Short-term support: 3,550–3,500
- Medium-term support: 3,300
- Extreme tail risk: 3,050, if geopolitical de-escalation combines with strong “risk-on” markets.
- Resistance: 3,700–3,750 remains the key ceiling if diplomacy fails and uncertainty reignites.
With realized volatility in gold around 35–40% versus implied volatility closer to 25%, options appear underpriced relative to recent price swings.
Trade Example: XAU/EUR 3,600 Put (Nov 5 Expiry)
Asymmetric trades are the essence of macro. One example currently on the table is a naked put option:
- Underlying: XAU/EUR
- Strike: 3,600
- Expiry: November 5, 2025 (19 days)
- Premium Paid: ~73 EUR/oz (break-even at ~3,527)
Payoff scenarios at expiry:
- Spot 3,500 → ~+25 EUR/oz
- Spot 3,300 → ~+225 EUR/oz
- Spot 3,050 → ~+475 EUR/oz
- Spot ≥ 3,600 → −73 EUR/oz (max loss)
This structure captures the essence of “Taleb-style” optionality: limited downside, potentially explosive upside if a geopolitical shock drives gold lower.
Orakel’s Outlook
- Base case (40% probability): Gold retraces to 3,500–3,300 as US–China talks and Trump–Putin headlines reduce safe-haven demand.
- Bearish tail (15%): A combined risk-on wave drives gold toward 3,050.
- Neutral (30%): Gold consolidates around 3,600–3,650 with little progress on diplomacy.
- Bullish tail (15%): If talks fail and tensions spike, gold retests 3,750–3,900.
Bottom Line
The next two weeks could be pivotal for gold. With implied vol still pricing relatively tame moves, puts offer attractive asymmetry. Even without a signed ceasefire, markets may react sharply to positive diplomatic headlines. For traders seeking convexity, being long optionality into these events makes strategic sense.
