Summary: Chinese speculators increased their positions yesterday but are stable today. ETFs purchased 280k yesterday, compared to 860k on Friday. The volatility move has been fairly stable; 3M ATM increased by +1v with a 25% RR of +0.3v; breakeven is around ~1.25% at 16v. Our trading flow this morning has predominantly been focused on buying volatility through call spreads, though the activity has varied; we've observed RKO unwinds, RKO rolls, vanilla profit-taking, as well as new positions anticipating another ~ $100/oz increase. We haven't observed any interest in strikes above $4,000/oz yet (though this might change when the US markets open). Currently, our quote ratio stands at 90% "macro" versus 10% "commodity fund." Our perspective remains that the pain trade is upward, as the weaker dollar and higher real asset appeal are increasingly drawing non-commodity AUM to gold, while the broader investment community remains underexposed. As one (commodity) client remarked, “Look at how well gold performed last week; it’s not as heavily long as you might believe.” We continue to maintain long positions via 3-6M skew. Additionally, it's noteworthy that China is courting foreign gold reserves in an effort to enhance its global influence: “PBOC is leveraging the Shanghai Gold Exchange to attract central banks from friendly nations to purchase bullion and store it within China.” I have doubts that many DM central banks are actually storing their gold in LBMA vaults, as it somewhat undermines the intent, but the trend is evident; China is aiming to assert greater dominance in global gold trading.