Why I'm Betting on a Surging Gold Price

Source: Seeking Alpha  (9/4/07)

...Similar to 2005, a research study by Adrian Douglas has once again noticed a massive build-up of call options in the October and December Comex gold contracts.

...over the years I have also learned that one should never underestimate the ability of the gold price to surprise when least expected. Friday’s jump of $8 is a case in point...

a most interesting research study by Adrian Douglas (www.marketforceanalysis.com), deals with an analysis of the open interest of Comex gold options. Douglas’s track record on this front is excellent as in November 2005, he predicted when the gold price was less than $460, that a mega-move was afoot. He based his forecast on a very large build-up of call options in the underlying stocks of the HUI Index. This turned out to be spot on as gold subsequently surged to $714 by May 2006.

This is where it becomes very interesting. Similar to 2005, Douglas has now again noticed a massive build-up of call options in the October and December Comex gold contracts.

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