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Hugo Pascal, Chief Investment Officer of InProved, recently highlighted critical daily levels for COMEX Gold February 2025 (Feb ’25) in a LinkedIn post. He pointed out key metrics including a 68.2% retracement level between $2,650 and $2,694 (-/+ 1 standard deviation), a call wall at $2,700 per ounce, and a 25 Delta Risk Reversal (DRR) at 0.1. These technical and market indicators provide a window into the evolving dynamics of the gold market.
In this article, we’ll explore what these levels mean, their significance in the broader context of gold trading, and how they shape market expectations.
COMEX, part of the Chicago Mercantile Exchange (CME), is the world’s premier platform for trading gold futures. These futures allow investors to hedge, speculate, or lock in gold prices for future delivery, making them essential for price discovery and risk management.
The Feb ’25 contract specifically reflects market sentiment and expectations for gold prices over the next 14 months, capturing influences like inflation forecasts, Federal Reserve policy, and geopolitical risks.
Hugo Pascal’s analysis highlights several crucial levels for Feb ’25 COMEX Gold, each offering unique insights into market dynamics:
1. 68.2% Retracement Between $2,650 and $2,694 (-/+ 1 Standard Deviation)
The 68.2% level is derived from Fibonacci retracement, a tool used by traders to identify potential areas of support and resistance. When combined with standard deviation, it provides a statistical range that reflects historical volatility.
2. Call Wall at $2,700 Per Ounce
A “call wall” represents a concentration of call options at a specific strike price, in this case, $2,700. This level often acts as resistance because of increased hedging activity by market makers.
3. 25 Delta Risk Reversal at 0.1
The 25 Delta Risk Reversal (DRR) measures the difference in implied volatility between call and put options with similar delta values. A DRR of 0.1 suggests a slight preference for calls over puts.
The combination of these metrics reveals important trends for the gold market:
1. Consolidation and Uncertainty: The retracement range and standard deviation highlight a phase of consolidation. This suggests a market in flux, waiting for a catalyst to drive prices higher or lower.
2. Potential Resistance at $2,700: The call wall at $2,700 per ounce points to a significant resistance level. If breached, it could signal strong bullish momentum, potentially pushing prices into uncharted territory.
3. Balanced Sentiment: The low DRR value indicates that the market is neither overly bullish nor bearish, reflecting cautious optimism among traders.
The gold market remains influenced by macroeconomic factors such as:
Hugo Pascal’s analysis of COMEX Gold (Feb ’25) offers a valuable lens into the technical and sentiment-driven factors shaping the gold market. By closely monitoring key levels like the $2,650–$2,694 retracement range, the $2,700 call wall, and the 25 Delta Risk Reversal, traders can better navigate the complexities of the market.
For investors looking to position themselves in gold, understanding these indicators and their implications is essential. Whether you’re hedging against inflation or speculating on price movements, the Feb ’25 contract provides a fascinating snapshot of the gold market’s medium-term outlook.
Stay tuned to InProved and Hugo Pascal’s LinkedIn updates for the latest insights on precious metals and commodities trading.
Hugo Pascal’s observation about the AU9999 contract hitting a 10-week volume high underscores the increasing significance of physical gold trading on the Shanghai Gold Exchange. This trend not only highlights robust domestic demand in China but also reflects broader shifts in the global gold market toward physical-backed assets.
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