Gold - to keep pushing higher on "debasement" trade?
Gold prices are trading at a 3-month high following the US Treasury's intervention in the bond market which have driven yields and the US dollar lower
Last week, US Treasury Secretary Scott Bessent said that he was doubling the size of buyback operations in 10 to 30 year debt in a bid to send long-term borrowing costs lower
⚠The buyback operation however, will further balloon the US administration's borrowing costs which have already surpassed USD 40 trillion for the first time in history
💵The falling US dollar makes other investments such as gold more attractive, giving rise to the so-called "debasement" theme that helped drive gold's 65% rally in 2025 (Bloomberg)
✳The SPDR Gold call warrant $SPDR GLD US MBeCW270120(EXQW.SI)$ (https://warrants.com.sg/tools/livematrix/EXQW) that was first listed on 17 July, has since jumped more than 6 times more than the $GLD US$(O87.SI)$'s 15.7% increase
✴Gold put warrant $SPDR GLD US MBePW270120(SQGW.SI)$ (https://warrants.com.sg/tools/livematrix/SQGW) on the other hand, has fallen 65.6% to SGD 0.022 over the same period
Those keen to trade further upside in gold prices can do so via call EXQW while those who see a short-term pullback from current levels can consider put SQGW
We published a technical view on gold prices by top trader Joey Choy on 20 August: https://warrants.com.sg/marketnews/highlight/todayhighlight/7928
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