Bearish sentiment on gold is rising! Traders are betting on another 40% decline over the next two years.

```

The wave of sell-offs in the gold market has not yet subsided, and signals from the options market show that some traders are betting that this decline will continue for the next two years.

The GLD ETF (SPDR Gold Fund) fell more than 3% again on Wednesday, having retreated a total of 25% from its intraday historic high in February. Options market data indicates that bearish sentiment is accelerating—on that day, put options dominated the options trades, with the most noteworthy transaction targeting an extreme scenario of gold dropping another 40% over the next two years.

Multiple bearish factors are piling up to exert pressure: The Turkish central bank is selling gold to support the lira, Gulf oil-producing countries are reducing holdings due to war-related financing needs, and India has raised its gold import tariff—all together intensifying downward momentum in the market. Meanwhile, a key technical support level has been breached, triggering further programmed stop-loss selling.

Intensive Bearish Signals in the Options Market

According to data from ThinkOrSwim and SpotGamma, about $200 million in options premiums were traded in the GLD options market on Wednesday, of which $130 million were related to put options. Among the top ten contracts by trading volume, eight were puts, and more than half of the put option premiums were traded at or above the asking price, indicating that these contracts were mainly actively bought.

The put contract with the highest trading volume was a $380 strike price contract expiring on the day itself, which is an in-the-money option. The second highest was a $240 strike price put contract expiring in June 2028, quoted at $11.50 per contract—this is a deeply bearish bet, suggesting traders expect GLD to fall another 40% in the next two years.

Multiple Bearish Factors Exert Pressure

Nigam Arora, founder of the Arora Report, listed multiple current reasons for gold being under pressure in an interview.

"The Turkish central bank is selling gold and buying dollars to support the lira, and Gulf countries—Qatar, UAE, Saudi Arabia—are continuously selling gold due to the need for war funding," he said. "Meanwhile, India has raised its gold import tariff, and traders who simply follow chart patterns were forced to trigger stop-loss orders when gold prices broke below the critical $4,400 support level."

The breach of technical support further amplifies the impact of fundamental bearishness, creating a downward trend marked by both fundamental and technical resonance.

Structural Opportunities May Arise in Mining Stocks

In contrast to the pessimism in the spot gold market, the options market for the gold miner ETF GDX shows a completely different picture. On Wednesday, call option trading volume for GDX was more than twice that of puts, with call option buys three times higher than puts.

The largest single GDX trade of the day was a trader selling 2,000 straddle combinations (selling both calls and puts) expiring December 2028, involving about $8 million in premiums. This strategy will be profitable as long as GDX remains in the $35 to $115 range at expiration, reflecting the trader's expectation of range-bound movement for mining stocks in the medium term.

Nigam Arora pointed out that gold mining stocks' gains when gold prices broke above $5,000 were far less than expected, but their cost structure is attractive. "If the average mining cost is around $1,500, their profits are still considerable," he said. "If you want to participate in the precious metals sector, GDX offers better value for money."

Risk Warning and DisclaimerThe market carries risks, and investments must be made cautiously. This article does not constitute personal investment advice and has not taken into account specific users’ special investment objectives, financial circumstances, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article fit their own situation. You are responsible for any investment based on this article. ```