As bullion hit a record last week, the trading of options on the SPDR Gold Shares ETF surpassed 1.3 million contracts, a level never reached before.

At the same time, the cost of hedging against declines in the exchange-traded fund sits near its lowest level since August while implied volatility has surged, an unusual pattern.

“Gold and bitcoin have exhibited spot-up, vol-up dynamics, similar to Mag 7 in recent years,” said Tanvir Sandhu, Bloomberg Intelligence’s chief global derivatives strategist. Call demand for the metal has surged, while the recent drop in the asset has made the implied volatility across strikes more balanced, he added.

Gold has already lost more than 5% from its intraday peak last week on signs some trade tensions may be easing. Meanwhile, hedge fund managers have cut their net long futures and options positions on the metal to the lowest level in more than a year, the latest Commodity Futures Trading Commission data show.

The recent risk-off period, catalysed by tariffs and led by the theme that “US exceptionalism” is ending, has helped gold’s strong outperformance versus other asset classes this month, including Treasuries and US equities.

But for Barclays Plc strategists, the metal is running ahead of its fundamentals. In a note last week, they pointed out that the recent streak of monthly gold purchases is not unusual relative to the long-term trend of central banks buying the asset.

The outperformance has also brought significant speculation, with calls on the gold ETF skyrocketing after Trump’s “Liberation Day,” leading to an inversion of skew, Barclays’s Stefano Pascale noted. That, along with the drop in hedge fund positioning and the recent decline in bullion are reasons to be cautious — at least in the short term, the strategists said.

“We think that gold is going to come down,” Pascale said in an interview, adding that the commodity is “dislocated” with respect to its “fundamental drivers” of the US dollar and real rates. “Technicals are starting to be a little bit stretched.”

Garrett DeSimone, head quantitative analyst at OptionMetrics, sees similarities with bitcoin. And to him, both assets could rally further as their implied volatility and skew remain within the long-term historical ranges.

“From the options market perspective, upside and downside weights are pretty even,” he said.

With Barclays’s proprietary indicator showing that sentiment is still bullish on gold, the strategists recommend selling June calls to buy puts for a zero-cost risk reversal.

“Obviously, the trade is mostly directional, so for this trade to really work gold has to come down,” said Pascale.