Options investors are increasingly paying for participation in further upside in gold, according to quantitative trading firm Susquehanna.

Gold has rallied while one-month implied volatility remains near recent lows, according to Chris Murphy, the co-head of derivatives strategy at the firm, noting that this allows investors to increase upside exposure without paying for higher volume. At the same time, the precious metal has seen renewed inflows.

Murphy cited a trade in which 8,000 November 460 calls on the SPDR Gold Trust were bought for about $5.55. The exchange-traded fund closed on Monday at $405.49.

Changes in skew, which measures demand for options at various price points, have been particularly key, Murphy noted.

Gold “skew has shifted materially away from downside puts and toward upside calls, reversing the earlier summer setup when put protection was relatively richer; that shift has already shown up in recent flow, ” Murphy said, noting a recent purchase of roughly 25,000 Sep. 350 puts for $0.62 that “took advantage of cheaper downside protection.”

“The backdrop is also being supported by flows, with gold funds seeing their strongest inflows since January,” the quantitative trading firm said.

Spot ⁠gold ‌was up 0.3% to $4,428.43 per ounce. U.S. gold futures for December delivery edged 0.2% higher to settle at $4,482.40.

When markets buckle, investors usually know where to hide: U.S. Treasurys, the Japanese yen and gold.

But in 2026, that playbook has not worked as expected. Treasury yields have climbed since the Iran war began, the yen has weakened to multi-decade lows against the dollar, and gold has fallen sharply from its January peak.

The reason, strategists say, is that this is not a classic risk-off episode. Inflation fears, higher real yields, fiscal concerns and wide interest-rate gaps are overwhelming the usual demand for safety — while investors continue to chase gains in AI-linked stocks.

Frederic Neumann, chief Asia economist at HSBC, told CNBC underlying risk appetite remains healthy and global financial conditions highly accommodative.

U.S. markets, as well as some Asian ones, have been hitting record highs as investors pile into AI-related names such as Nvidia and Intel stateside, and Samsung Electronics, SK Hynix and Taiwan Semiconductor Manufacturing Company in Asia.

His view is supported by Henning Potstada, global head of multi asset at asset manager DWS. 

“The driver of equities is EPS growth, that’s the only driver that matters on the long run for equities, and EPS forecasts are going up,” Potstada told CNBC.

With all the geopolitical uncertainty currently swirling around, bonds have not seen flight to safety flows because of two factors: inflation expectations and debt sustainability.

Postada of DWS explained: “We had the Iran war, which led to a closure of the Straits of Hormuz, [and] led to oil prices going from $60 to $120, leading to inflation forecasts, or actually, realized inflation moving up, and this is the situation when bond markets are not driven by growth but driven by inflation expectations.”

Rising inflation expectations generally make bonds less attractive, as they erode the purchasing power of future fixed-interest payments, causing current bond prices to drop.

As for debt sustainability, despite strong investor confidence in Treasurys, the U.S. federal deficit has caused some worries. 

Last year, Goldman Sachs vice chairman Rob Kaplan said: “We’ve always talked about deficits, but we’re more highly leveraged on a net-debt basis than we’ve been in our lifetimes.”

At the time, Kaplan said that the country’s projected budget deficit of around $2 trillion, which is about 6-7% of GDP, is historically high outside of a recession.

However, actual numbers were lower. The U.S. is on track to run a federal budget deficit of roughly $1.9 trillion, or 5.8% of GDP, in the 2026 financial year according to the Congressional Budget Office.

Gold fell to a fresh six-month low on Thursday as investors dump the once-hot trade on growing concern that higher inflation will force the Federal Reserve into possibly raising rates later this year, or at least keep them steady.

There are other factors at play as well.

August gold futures touched $4,046.20 on Thursday, their lowest level since November. Gold is down 6.3% this week alone, putting it on pace for a second straight weekly loss and its worst week since mid-March,  when gold fell 9.62%.

It was last down 0.5% to $4,111.10.

Fed reversal

As a safe-haven asset, investors gravitate towards the yellow metal during times of market uncertainty and in hopes that it will act as a hedge against inflation. But because gold doesn’t yield anything, the metal is also especially sensitive to expectations for long-term, real interest rates.

The Iran war, now in its fourth month, has fueled inflation by pushing energy and other prices higher.

U.S. consumer inflation in May increased at its fastest pace in three years in May, mainly from the surging prices of energy-related products. Together with a stronger-than-expected May jobs reports, expectations have grown that the Fed may need to raise interest rates by the end of the year to slow down price increases. 

Next week, the Federal Reserve is expected to hold its benchmark lending rate steady at 3.50% to 3.75% during Kevin Warsh’s first meeting as Fed chair. A majority of ⁠economists in a Reuters poll expect interest rates to remain unchanged ⁠this year after many were penciling in multiple rate cuts to start the year.

Traders less sanguine, and are currently pricing in a 67% chance of a Fed rate hike by December, according to the CME Group’s FedWatch tool. Higher rates, if they help stamp out inflation, can make dollar-denominated assets such as Treasury securities more attractive. 

The technical breakdown

Based on price chart analysis, the overall technical picture for gold remains weak.

Gold recently broke below its 200-day moving average for the first time since September 2023, which Citigroup flagged as a major negative signal. The bank has been cautious near-term on gold ever since the war escalated in March, partly due to higher energy costs springing from the closure of the Strait of Hormuz.

Long-term, Citi was more bullish, however. “Despite the negative near-term momentum, we expect gold price to eventually rebound when the Strait situation deescalates,” its analysts said.

JPMorgan is more pessimistic, saying retail and institutional investors have retreated from the so-called “debasement trade” based on a belief that the U.S. dollar would continue to depreciate. The bank cited outflows from gold…

The surge in oil prices and ongoing volatility have netted major gains in a corner of the market that rarely captures headlines: quantitative trend-following hedge funds.

Quantitative trend-followers — also known as commodity trading advisors (CTAs) or managed futures funds — use complex machine-learning algorithms, statistical analysis and factor-based modelling to identify price trends across futures markets, including equities, bonds, commodities and currencies.

The spike in commodity prices caused by the war in the Middle East has handed them one of their richest trading environments in years.

By trading on both rising and falling markets, with investment decisions made by computer-based systems driven by data and signals rather than human judgment or emotion, CTAs can often provide uncorrelated returns and so-called “crisis alpha” to investment portfolios during market turbulence.

Societe Generale’s main SG CTA Index — the sector’s main benchmark and the key barometer for trend-following strategies’ overall performance —  is up more than 12.2% year-to-date to June 3. The SG Trend Index, a daily performance tracker of the 10 biggest trend-following hedge funds, has risen 12.3% over the same period.

Energy commodities have been a standout contributor to CTAs’ gains since the start of the Middle East conflict on Feb. 28.

But the splintering narrative around the conflict and the increasingly uncertain direction of U.S.-Iran peace negotiations are now pushing such strategies to scale back their oil bets.

Helen Doody, head of Abbey Capital U.S., said many funds established long energy positions early in the first quarter as the price of crude oil rose.

“They were positioned to capture the sharp rally that occurred in late February and early March due to events in Iran,” Doody told CNBC via email. “CTA strategies also typically participated in the up moves in distillate contracts like gasoline and diesel.”

Nicolas Gaussel, CEO and CIO of Paris-based CTA Metori Capital Management, which trades both commodities and financial contracts, said roughly a third of his firm’s performance this year has come from energy trades.

Hello, this is Priyanka Salve, writing to you from Singapore.

Welcome to the latest edition of “Inside India“ — your one-stop destination for stories and developments from the world’s fastest-growing large economy.

For more than two decades, consecutive U.S. administrations have seen India as a counterbalance to China’s growing influence in the Indo-Pacific. But the current U.S administration’s stances seem to favour Beijing while punishing India. This week, I unpack how the U.S.-China summit could impact New Delhi’s equation with Washington.

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India, whose significance to the U.S. foreign policy has been shaped by frictions between Washington and Beijing, will be keeping a close eye on the meeting between President Donald Trump and his Chinese counterpart, Xi Jinping.

When the summit between the world’s top two economies begins later in the day, India will be hoping that Trump’s softening stance toward China does not lead to a bargain that diminishes New Delhi’s role in the Indo-Pacific, experts said.

If Trump prioritizes a bilateral grand bargain with Beijing, India will have “reasonable concerns that the United States will treat China as the central negotiating partner in Asia rather than as the central strategic challenge,” Ronak D. Desai, visiting fellow at the Hoover Institution, Stanford University, told CNBC.

Therefore, “India will need to make its strategic value harder to overlook,” Desai said, adding this would mean the U.S.-India relationship must lead to more tangible outcomes in sectors like defense, maritime security, critical minerals, energy, and manufacturing.

Trump and Xi last met in Busan, South Korea, in November, where the U.S. president called Xi “a very tough negotiator,” and said that the two sides had “always had a very good relationship.” Meanwhile, Xi urges Beijing and Washington to be “partners and friends.” It was during this meeting that Trump also referred to China and the U.S. as G2.

“He [Trump] favors strong-armed leaders,” Nirupama Rao, former Indian ambassador to the U.S., China, and Sri Lanka, told CNBC’s “Inside India” on Monday, hinting at Trump’s conciliatory stance toward Xi in the recent past.

Hello, this is Priyanka Salve, writing to you from Singapore.

Welcome to the latest edition of “Inside India“ — your one-stop destination for stories and developments from the world’s fastest-growing large economy.

Rising incomes and a large population base make India a key market for global consumer-focused companies. But now, celebrity endorsements and wide distribution are not enough to reel in customers. Viral social media videos are influencing consumer choices — and brands are responding.

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Social media influencers are ushering in a massive change in India’s packaged food and beverages space, as they urge consumers to read labels, pushing big brands to make healthier products or risk being replaced by new entrants.

One of the world’s largest packaged food and beverages companies, PepsiCo, is the latest to respond to changing customer preferences.

“Today, more than 50% of our beverage portfolio in India comprises low- to no-sugar offerings,” said Nitin Bhandari, vice president and general manager of beverages at PepsiCo India, adding that the company aims to “scale low- and no-sugar options to 90% of our beverage portfolio over time in India.”

PepsiCo gathers consumer insights through engagement forums, social media, as well as its WhatsApp-based consumer loyalty platform, PepGenie, Bhandari told CNBC in an email.

In the next five years, India’s income per capita is expected to grow at the highest rate among the top five emerging markets for consumer products, including China, Brazil, Mexico, and Russia, according to Bain & Company, making it a priority for global consumer product companies.

Global companies already dominate the world’s fastest-growing major consumer market across 20 product categories from soft drinks and spirits to savory snacks, detergents, and diapers, the report said.

Indian market opportunity, however, comes with the pressure to pivot strategy based on consumer preferences. And social media has emerged as a key platform for public advocacy over the past few years, raising awareness around food safety and mislabeling in India.

Celebrity endorsement-driven brand trust has shifted to “community-verified trust,” because of social media influencers, said Shamik Kumar, a veteran food safety expert who has worked with multinational companies in India.

Social media influencer Revant Himatsingka, who goes by Food Pharmer on social media, has millions of subscribers, and has faced pushback from consumer companies, says his content makes people read labels and, as a result, companies are making better quality products.

Over the past few years, several brands, including Mondelez-owned Bournvita and…

Hello, this is Priyanka Salve, writing to you from Singapore.

Welcome to the latest edition of “Inside India“ — your one-stop destination for stories and developments from the world’s fastest growing large economy.

Over the past two decades, India’s IT sector has been driving a consumption boom that has in many ways anchored the India growth story. But as AI forces IT companies to shift away from volume hiring, it exposes a critical gap that risks hampering economic growth: a lack of quality jobs.

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Few global events have dented India’s fabled growth story.

Even as the conflict in the Middle East disrupts global supply chains, the IMF earlier this month reaffirmed its forecast that India will remain the fastest-growing large economy in 2026.

But last week, global equity research firm Bernstein wrote an open letter to Indian Prime Minister Narendra Modi, warning of a deepening employment crisis in the country, especially as artificial intelligence threatens quality jobs in the information technology sector.

Those jobs with relatively high wages and productivity have had spillover effects across real estate, education, and services, making white-collar employment a key pillar of the country’s economic growth.

For the past two decades, 10 million to 15 million Indians working in IT services and the business process outsourcing industry have anchored the “aspirational middle class—buying homes, taking flights, driving consumption,” Bernstein said. “Gen AI now challenges that template.”

India’s IT sector used to outcompete global peers as the vast talent pool at relatively low cost gave it an edge, experts said. But AI has tilted this equation in favor of tech arbitrage, from labor arbitrage earlier. The lack of quality jobs will stress-test the India growth story, which relies on the demographic dividend and domestic consumption.

“Without job creation, India’s consumption-led economy will struggle to grow, limiting investment demand at a time when the export growth-led model is at risk globally,” Shumita Sharma Deveshwar, chief India economist at GlobalData TS Lombard, told CNBC.

“India has struggled to raise the share of manufacturing in the economy to shift labour from farm to factories,” she said, adding that the AI boom now poses a threat to jobs in both manufacturing and services.

Close to 45% of India’s workforce continues to depend on agriculture, which only contributes 15%–16% of its GDP, according to Bernstein.

In an interview with CNBC-TV18 during the AI Summit earlier this year, Ashwini Vaishnaw, India’s IT minister, acknowledged that disruption to jobs in the tech sector was a “real challenge,” but stressed that the solution was in “upskilling and reskilling the workforce.” The Indian government expects AI to reinvent the country’s IT sector.

“Not all jobs are at risk of being replaced by AI,” said Alexandra Hermann Prasad, lead…

Hello, this is Priyanka Salve, writing to you from Singapore.

Welcome to the latest edition of “Inside India“ — your one-stop destination for stories and developments from the world’s fastest growing large economy.

Indian consumers’ desire to shift away from gasoline-based cars should have been Tesla and BYD’s moment to shine in the world’s third-largest auto market. But legacy carmakers that have dominated the Indian market for decades have an ace up their sleeve — hybrid cars.

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The demand for electric vehicles is surging worldwide, but Indian consumers are choosing a different ride — hybrid cars that don’t need external charging.

Hybrid cars are expected to reach 10% of total car sales in India in the financial year ending March 2027, while EVs are expected to account for 5%, according to a report by Indian research firm Care Ratings.

Cost-conscious consumers who were previously buying diesel vehicles have started shifting to hybrids, Puneet Gupta, director at S&P Global Mobility with a focus on the Indian market, told CNBC.

Hybrid vehicle sales have risen nearly fourfold in the world’s third-largest auto market to 362,866 units in the financial year ending March 2026, from 98,010 units in the financial year ending March 2020, according to Care Ratings.

Meanwhile, annual sales of electric vehicles were 131,865 units in the year to March 2026, the report, based on the Indian government’s vehicle registration data, showed.

“It’s clear that hybrid cars are gaining traction [in India] faster than EVs in the passenger car segment,” Diwakar Murugan, senior automotives analyst at Omdia, said in an email to CNBC. He added it was “remarkable” that hybrids are punching above their weight, having achieved strong growth with just eight models in the market so far, compared to more than 40 EV models.

The shift away from internal combustion engine, or ICE, vehicles should have ushered global EV companies like Tesla and BYD into India, but it turns out that Japanese manufacturers, who already dominate India’s auto space, are set to deepen their grip on the market by offering hybrid cars instead of pure EVs.

Tesla has sold fewer than 400 cars while BYD has sold less than 7,000 in India since 2025, according to government data.

Even in the EV space, automakers Mahindra & Mahindra and Tata Motors, which primarily sell ICE cars, are the leading players. That’s a stark contrast to BYD and Tesla’s global dominance: in 2025, BYD became the world’s top EV seller with 2.26 million units, while Tesla sold 1.64 million.

In hybrids, Japan’s Toyota and Maruti Suzuki — the Indian subsidiary of Suzuki Motor — are the top manufacturers in India, with popular models including the Toyota Innova Hycross and Maruti Grand Vitara, said Arun Agarwal, vice president of fundamental research at Indian brokerage Kotak Securities.

These companies already dominate the broader…

Hello, this is Priyanka Salve, writing to you from Singapore.

Welcome to the latest edition of “Inside India“ — your one-stop destination for stories and developments from the world’s fastest growing large economy.

Amazon and Walmart’s Flipkart dominate India’s e‑commerce market. This week, I unpack why the U.S. giants are keen to expand in the South Asian country where only 30% of the population shops online.

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Last December, when Amazon pledged a massive $35 billion investment in India including for digitizing over 12 million small businesses and enhancing logistical infrastructure, the scale of the commitment seemed disproportionate to the market’s size.

Only 30% of Indians shopped online in 2025, far behind China (92%) and the U.S. (74%), according to a Bain & Co. report earlier this month. E‑commerce accounted for just 1.6% of India’s GDP, compared with 4%–4.5% in Indonesia and 13%–14% in China, Bain added.

But then India is the world’s fastest‑growing e‑commerce market, with online shopping spreading rapidly from major metros to smaller cities and towns.

Take Evelyn Nazareth, a schoolteacher in her 30s who lives in Jaipur, and is among a growing cohort of avid online shoppers outside India’s largest cities. She shops on major e‑commerce platforms three to four times a month and orders from ultra‑fast delivery apps almost daily.

Once, she ordered a smartphone online and received a feature phone but was billed for the former. That unpleasant experience, however, did not turn Nazareth away from online shopping. She simply switched platforms.

Online shopping has since become a habit. “I can shop anytime without stepping away from what I’m doing,” she said, noting the broader choice available online, especially for fashion. “When I buy something others around me don’t have, it makes me feel different.”

Jaipur is not a metropolis, and it is these relatively smaller cities that now account for more than 60% of India’s online shoppers, Praveen Govindu, a partner at Deloitte India, told CNBC. They generate a similar proportion of e‑commerce orders, he said, marking “a decisive shift in audience dynamics.”

India’s e‑commerce market experienced a compound annual growth of 23% between 2020 and 2025, driven by both a rising number of users and higher spending per shopper, Govindu said. Deloitte, in a report on earlier this month, forecast that the sector will become a $250 billion market by 2030.

Walmart-owned Flipkart Group, which includes Flipkart Minutes, Myntra and Shopsy, “is widely viewed as the market leader in India’s e‑retail landscape,” said Manan Bhasin, a partner at Bain & Company.

In June last year, a report by marketplace analytics firm MerchantSpring said Flipkart holds 48% of the…

Hello, this is Priyanka Salve, writing to you from Singapore.

Welcome to the latest edition of “Inside India“ — your one-stop destination for stories and developments from the world’s fastest growing large economy.

Just as India’s textile industry was beginning to stabilize after U.S. tariffs, it received another blow. Industry leaders tell me the Iran war has raised costs, hit demand and sent workers fleeing, crushing hopes of a sustained recovery.

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Indian textile exporters could be forgiven for thinking that U.S. President Donald Trump has them in his crosshairs.

In August last year, Washington slapped a 50% tariff on Indian goods, making exports uncompetitive. Relief came months later, when rates were slashed in February, but it lasted barely a few weeks: Trump’s subsequent war on Iran plunged India’s textile industry into fresh turmoil.

Ready-made garment companies were among the worst-hit by the U.S. tariffs, losing orders or being forced to offer discounts to retain customers, experts said, adding that the Iran war has driven up raw material and packaging costs.

The war, which began on Feb. 28 after the U.S. and Israel struck Iran, has disrupted the movement of goods through the Strait of Hormuz, driving up energy and freight costs and straining supply chains.

This has led to some unusual challenges for the textile industry, India’s second‑largest employer which supports more than 45 million jobs.

Industry leaders said some migrant workers employed by the textile companies were struggling to secure liquified petroleum gas, the primary cooking fuel. This has prompted some to return to their home towns.

“It was a tough year, and just when things were starting to come together in February, this war started,” Ashwin Chandran, chairman of the Confederation of Indian Textile Industry, told CNBC.

Between April 2025 and February this year, India exported cotton and man‑made yarns, fabrics, and ready-made garments worth $29.5 billion, down from $29.8 billion a year earlier, according to data from the Indian commerce ministry. While the decline may appear modest, the direction of travel is worrying for a country that aims to export $100 billion worth of textiles annually by 2030.

“We were expecting FY27 [financial year ending March 2027] to be much better, but now, with the Iran war, the beginning hasn’t been encouraging,” said Madhu Sudhan Bhageria, chairman at synthetic and polyester filament yarns manufacturer Filatex India.

He explained that polyester prices — which depend on petroleum — have risen more than 40% since the start of the war, making it difficult to pass on costs to customers.

“Demand has fallen as people don’t want to buy at high prices,” Bhageria said,…