Gold one-month risk reversals shed bullish bias

• One-month risk reversals show falling demand for XAU calls. 
• Long-run upside bias intact. 

The XAU/USD (Gold) one-month 25 delta risk reversals, which shows the volatility premium for XAU put strikes vs XAU call strikes, fell to zero (neutral) today vs. 0.125 yesterday. The recent high of 0.40 was seen on Feb. 14. 

The decline from 0.40 to 0.00 indicates falling implied volatility premium for XAU calls (buy gold) over XAU puts (sell gold). So, the options market has shed short-run bullish bias on gold. 

That said, the long-run bullish outlook is still intact. The one-year 25 delta risk reversals are being paid at 0.65 XAU calls vs. January low of 0.0. The recent high was 0.70 XAU calls.