Gold Options Reveal a Wager on Another 40% Collapse by 2028

Options traders in the SPDR Gold Shares (GLD) ETF have turned sharply bearish. One popular contract now bets gold will fall another 40% by June 2028.

The fund has dropped 25% from its February intraday record. Gold itself has lost 26.5% since its January peak, erasing $9.75 trillion in market value.

Gold and Silver Shed $12.95 Trillion in 132 Days

Precious metals have sold off hard as the US-Iran war reshapes safe-haven flows. BullTheory put the combined losses from gold and silver at $12.95 trillion in just 132 days.

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Silver has fared even worse than gold. The metal is down 47.69%, shedding $3.2 trillion in value.

Amid this, banks are also growing cautious. Citigroup lowered its three-month gold target to $4,000 per ounce from $4,300.

“We see limited catalysts for a sustained move higher in the very near term,” the analysts said.

Gold’s Bearish Bets Now Stretch Into 2028

The bearish sentiment has also spread to the options market. Of the $200 million in GLD options premium traded Wednesday, $130 million was tied to puts, CNBC reported, citing data from ThinkOrSwim and SpotGamma. 8 of the 10 most active contracts were puts, and most were bought rather than sold.

The second-most popular contract was the 240-strike put expiring in June 2028, priced at $11.50. That position turns a profit if GLD falls roughly 40% from current levels.

Nigam Arora, founder of the Arora Report, blamed official-sector selling for the rout. He also cited higher Indian import duties and stop-loss triggers at $4,400 or lower.

“Turkey’s central bank is selling gold and buying dollars trying to support the lira, and the gulf nations – Qatar, UAE, Saudi Arabia – they need the money for the war so they’ve been selling gold, too,” he said.

However, not everyone expects the decline to persist. Economist Peter Schiff argued a prolonged conflict favors gold as the metal retests its March low.

“Gold is down over $100, trading below $4,150. It’s retesting its March 23 low of $4,098. That bottom was established the first time Trump claimed the Iran war would soon end, sending gold back above $4,800. But a long, drawn-out war is far more bullish for gold than a quick end,” he noted.

For now, options traders appear firmly positioned for further downside. The surge in put activity, combined with weakening price targets from major banks, suggests many investors expect the precious metals selloff to continue. 

Still, with geopolitical tensions remaining elevated and some analysts viewing the recent decline as temporary, gold’s next move may depend on whether safe-haven demand can reassert itself in the months ahead.

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