Traders pile into GLD puts betting on 40% gold drop

Options traders allocated about $130 million of roughly $200 million in SPDR Gold Shares (GLD) options premium to puts on Wednesday. Eight of the 10 most active GLD contracts were puts and most of those were bought rather than sold. A 240‑strike put expiring in June 2028 traded near $11.50; that position would profit if GLD falls about 40% from current levels.

GLD has dropped about 25% from its February intraday record. Gold bullion is down roughly 26.5% from its January peak, a decline market data estimate erased about $9.75 trillion in value. Silver has fallen about 47.7%, removing roughly $3.2 trillion, putting combined losses for the two metals at about $12.95 trillion over a recent 132‑day span.

Market participants cited shifting safe‑haven flows linked to the US‑Iran war and selling by official holders as contributors to the price declines. Nigam Arora, founder of the Arora Report, attributed part of the rout to central‑bank and sovereign selling and pointed to higher Indian import duties and stop‑loss triggers near $4,400: “Turkey’s central bank is selling gold and buying dollars trying to support the lira, and the gulf nations — Qatar, UAE, Saudi Arabia — they need the money for the war so they’ve been selling gold, too.”

Major banks adjusted near‑term views as prices weakened. Citigroup reduced its three‑month gold target to $4,000 an ounce from $4,300, citing limited near‑term catalysts for a sustained rally.

Economist Peter Schiff said a prolonged conflict would support bullion demand and suggested the recent lows could be temporary: “Gold is down over $100, trading below $4,150. It’s retesting its March 23 low of $4,098. That bottom was established the first time Trump claimed the Iran war would soon end, sending gold back above $4,800. But a long, drawn‑out war is far more bullish for gold than a quick end.”

Options activity Wednesday showed concentrated put buying alongside downward revisions to near‑term price targets. Market participants and analysts cited geopolitical tensions and official‑sector selling as factors affecting positioning in GLD and the underlying metals.