Yeliz Akmaca 
As of February 17, 2026, spot gold is trading at $4,947, April US gold futures at $4,966, while silver fell 2.7% to $60.3. But why are investors still betting on $20,000 gold options despite this sharp drop? After a historic collapse, market volatility and a strengthening dollar continue to fuel speculation about the metal’s future.
A Strange Energy in Gold Markets After a Historic Collapse
Following a historic crash, the gold market is showing unusual momentum. The metal briefly surpassed $5,600 per ounce, then experienced one of the sharpest daily declines in decades; yet investors continue to aggressively bet on gold reaching $20,000. December 15,000–20,000 USD gold call option spreads have accumulated around 11,000 contracts, indicating serious positioning on such high-priced instruments.
In January 2026, metal futures volumes at the Shanghai Futures Exchange rose 86%, prompting 38 regulatory interventions. Analysts remain divided: some foresee a long-term bull market, while others warn of risks from excessive speculative positioning.
Walter Bloomberg commented, “$20,000 gold option contracts continue rising despite the record selling wave. Even after a historic correction, high-priced bullish bets are increasing. Prices may consolidate around $5,000, but roughly 11,000 contracts are in play.” This highlights the scale of positions taken far from current prices.
Speculation and Macroeconomics: Drivers Behind the Rally
These high-risk trades function like low-cost, high-potential bets. For these spreads to end profitably, gold would need to nearly triple by December, requiring a major macroeconomic or geopolitical shock. However, these positions are already influencing market psychology, increasing implied volatility and fueling aggressive upward demand.
Macro analyst Michael van de Poppe stated, “Gold may consolidate for 1–2 years in the short term, but that doesn’t mean we are not in a bigger bull market. Actually, we are. That’s why I plan to buy gold during a 30–50% drop ahead.” This view reflects growing belief that gold’s rise is driven by structural changes in the global financial system, not just cyclical factors.
Short-Term Volatility and Risks
While long-term bullish expectations remain, short-term volatility stays high. Commodity strategist Ole Hansen noted that falling US inflation and declining bond yields have supported gold, but trading volume and liquidity in China can significantly affect short-term prices.
The rally in metals coincides with a surge in speculative activity in aluminum, copper, nickel, and tin futures in China. Exchanges tightened margin requirements and trading rules repeatedly, showing the market is overheating. Additionally, central bank diversification and China’s shift from US Treasuries to gold reinforce macro-geopolitical support for demand.
However, not all are convinced of sustainability. Commodity strategist Mike McGlone warned that excessive positioning has historically preceded corrections, and high volatility plus speculative flows could leave markets vulnerable if macro conditions change.
Gold Price Pullback: February 17, 2026 Analysis
Holiday quiet in Asian markets and a strong dollar continue to weigh on gold. Fell nearly 1% to $4,947, April US gold futures dropped 1.6% to $4,966.
Three key reasons for the decline stand out: a stronger dollar, low trading volumes in China and neighboring markets, and easing geopolitical tensions. According to CME FedWatch, the market expects three 25-basis-point rate cuts from the Fed this year. Normally this would support gold, but the dollar’s resilience is currently offsetting that effect.
Silver followed a similar path, dropping roughly 2.7% due to dollar pressure. Investors now await market direction after the holiday, with eyes on upcoming Fed minutes and US GDP data.
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