Analysis: Gold price crash may be exacerbated by "gamma squeeze"
PANews, January 31—According to Jinse Finance, institutional analysis indicates that Friday's sharp drop in gold may have been accelerated by a so-called "gamma squeeze." This situation occurs when prices cross major option strike levels, requiring dealers holding short option positions to buy more futures (or shares of gold ETFs) to balance their portfolios. Conversely, when prices fall back through these levels, they need to sell. For the SPDR Gold ETF, a large number of options with strike prices at $465 and $455 expired on Friday, while CME's March and April options also had significant positions concentrated at $5,300, $5,200, and $5,100.
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