From : By Omkar Godbole



The broad-based USD weakness post-Fed lifted the yellow metal to a five-week high of $1,350 last week.


The surge in prices has boosted demand for the XAU/USD calls (buy gold), the risk reversals indicate. For instance, the one-month 25 delta risk reversals (XAU1MRR) are being paid at 0.6 XAU calls vs. 0.5 XAU puts on March 21.


The rise in the implied volatility premium for XAU calls indicates the investors are seeking hedges against further upside in gold prices.