Goldman: Options Demand Pushes Prices Towards $4,900

Gold prices have been surging towards $4,900 as demand for bullish options amplifies further gains, according to Goldman Sachs.

The bank warns that this mechanism can work in reverse, with a price pullback potentially triggering dealers to unwind hedges and deepen any sell-off.

This phenomenon is being driven by receding expectations of a September Federal Reserve rate hike following the July policy hold and softer jobs and inflation data.

Goldman Sachs notes that Western investor demand and central bank buying are also contributing to the rally, with ETF demand boosted due to speculative positioning on COMEX.