Anyone buying gold calls right now, slow down. Gold’s been up for 9 weeks straight. Nine. It has never made it ten in a row. Every single time it hit this streak, the next two months tanked. Not slightly. Every single time, 100% negative returns. On average, gold lost about 3.5% in those two months after a nine-week rally. That might not sound huge until you realize leveraged calls magnify that loss ten times or more.
And here’s the thing people forget. When gold drops, it does not tiptoe. It falls hard, fast, sometimes overnight. In one week in 2013, gold lost over $200 an ounce, and people holding calls got wiped out before they even knew what hit them. You cannot sell. You’re stuck staring at your screen while your positions vanish. If you’re highly leveraged, even a small slip can liquidate you before you blink.
I am not saying don’t buy. The economy does make a case for gold. U.S. household debt hit $1.33 trillion in August. The dollar has lost roughly 18% of its value over the past five years. Central banks are still buying aggressively. Inflation is still hovering around 4% after years of intervention. But that does not mean this ride keeps going up. The market does not care about your thesis. It only cares about momentum, panic, and timing.