Gold options point to $1,200

By Frank Tang - Analysis NEW YORK (Reuters) - Heavy bets in deep out-of-the-money calls and other bullish plays in the gold options market indicate bullion has a shot at rallying to an all-time peak of $1,200 an ounce by the end of the year. Gold has soared furiously -- a few years ago the metal was trading at $250 an ounce -- as investors poured into the market due to inflation fears, a weakened dollar and market turmoil. "There are a lot of people who think that by the end of the year we'll be trading $1,200 to $1,500. They are not very expensive options, so people are buying them," said John Bilello, COMEX gold options floor trader. Bilello said that many option investors were currently adjusting positions after gold's sharp fall but he saw recent strong volume of December $1,000 calls, bull call spreads between $1,200 and... [read full story]