For the first time in recent months, the puts on SPDR Gold Shares -- the exchange-traded fund that everyone uses as the primary proxy for the commodity -- are becoming more expensive relative to calls. Changes in “skew” which is the difference between the volatility of out-of-the-money puts and calls, is often the canary in the gold mine.
According to a proprietary trader at a major international bank, “Skew has come in a lot, and it has flattened. This tells you that more people want to buy protection than buy upside, calls. This is natural with anything that has had a big price run-up, but this is somewhat of a bearish indicator for gold. The mood is changing.”

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