Since testing 12-year highs back on March 13, the U.S. dollar index has fallen 3 percent. In that same time frame, gold has gained almost 5 percent. After disappointing gold bugs for much of the first quarter of 2015, the yellow metal is now 2 percent up for the year.
A trade in options on the SPDR ETF tracking gold (trading with the ticker symbol GLD) indicates some expect gold's rally to continue. Specifically, a trader purchased 50,000 contracts of the 120-strike calls expiring in June for $1.18 each. As each contract controls 100 shares, the trader is wagering $5.9 million that the GLD will close above $121.18, or at least 4 percent higher from Tuesday's close by mid-June. A call is a bullish bet giving purchasers the right to buy shares at a set price within a given time.
According to Stacey Gilbert, head of derivative strategy at Susquehanna, the trader is clearly looking for a quick spike in gold prices.
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