Gold Price Flashes Warning Signs of Major Breakout to $5,000

Gold prices have been experiencing a rollercoaster ride lately, but recent data suggests that investors are increasingly betting on higher prices. The spot price of gold is currently trading at $4,590 an ounce, while U.S. gold futures slipped 0.2% to $4,643.20.

The more interesting signal may be coming from investors themselves. Gold call-option activity has climbed to levels last associated with the gold price near $5,000, and GLD attracted $3.4 billion in one week. With $5.8 billion flowing into the fund this month, traders are asking one question: could the $5,000 price become gold's next major target?

Call options give traders the right, but not the obligation, to buy an asset at a set price. When demand for these contracts picks up, it often means traders are betting on higher prices ahead.