Bullish Case: AU's implied volatility term structure suggests moderate risk over coming months. Bullish sentiment across options tenors (32% more than bearish) and price recovery patterns support potential upside.

Bearish Case: The historical return surface indicates frequent negative returns. Elevated implied volatility across strikes and macroeconomic uncertainties could pose downside risks.

Potential Outcomes:

• Sideways Movement (45%): Current flat term structure suggests stability.
• Bullish Breakout (35%): Positive sentiment and historical resilience might drive price higher.
• Bearish Correction (20%): Potential macroeconomic headwinds and volatility could trigger declines.

Trading Oracle: Implement a bullish debit spread by buying a $29 call and selling a $31 call with 60-day expiration. The rise in implied volatility and positive sentiment create high reward potential. Focus on capturing moderate gains while managing risk with limited exposure.

January 22, 2025