Institution: Gold price avalanche-like plunge may be exacerbated by "gamma squeeze"

Institutional analysis indicates that the sharp decline in gold prices on Friday may have been accelerated by so-called "gamma squeezes." This occurs when prices pass through significant option strike prices, causing traders holding short option positions to buy more futures to balance their portfolios, and then sell when prices fall back through these levels. For the SPDR Gold ETF, there were a large number of options expiring at strike prices of $465 and $455 on Friday, and there is also a concentration of positions in March and April options on the Chicago Mercantile Exchange at strike prices of $5300, $5200, and $5100.