Gold Option

Gold Option

A contract giving the holder the right (but not the obligation) to buy (in a call) or to sell (in a put) a certain quantity of gold at a stated price on or before the expiration date of the contract. Because gold is considered a hedge against inflation (that is, it retains its value during bouts of inflation), one may purchase a gold call if one thinks the inflation rate might accelerate. Conversely, one may purchase a gold put if one is concerned about disinflation.