Sell gold rallies, investment appeal to wane

Deutsche Bank sees gold as range-bound (1750-1960) and says to sell nearer the top end of the range. "Barring tail events such as new viral variants evading vaccine-induced immunity, or the Fed easing into the recovery, we see gold as unlikely to exceed 2020 highs. We see gold rangebound between USD 1,750-1,960/oz in the next quarter and recommend selling rallies at the top of the range". If you believe in the gold range logic (JPM outlined this logic a few weeks back as well) then gold volatility, GVZ, remains one of those vols that is still holding up relatively well. Recall gold vol trades with an upside skew as gold is a hedge itself, hence the recent move lower (chart 2). Three month GLD implied vs realized vols remain in sync, so hard to argue gold vol is cheap or expensive given the moves (chart 3), but if you believe in the DBK/JPM range logic, use options at range extremes to play both direction and vol.