Gold: Options market most bearish since April 2020

One-month risk reversals on gold, a gauge of calls to puts, fell to a 10-month low on Wednesday, indicating investors are adding bets to position for weakness in the yellow metal. 

Risk reversals traded at -1.025 in favor of puts or bearish bets on Wednesday, the lowest level since April 21, 2020, according to data provided by Reuters. The gauged peaked at 1.60 in favor of calls on Feb. 1. 

The negative reading indicates put options are drawing higher premium (option price) than calls or bullish bets. In other words, the options market is most bearish in 10 months. 

The yellow metal is currently trading near $1,782 per ounce, representing a more than 3% month-to-date drop.