ALEXANDRE HOUPERT<br /><strong>HEAD OF LISTED PRODUCTS UK, SG CORPORATE &amp; INVESTMENT BANKING</strong><br /><br />SINCE the start of September, gold has risen in price from $935 per ounce to around $1,020 yesterday, an increase of 9 per cent. Gold&rsquo;s popularity has seen a resurgence during the crisis thanks to it being seen as a safe haven. This could still be the case.<br /><br />As the recent G20 summit reminded the markets, the financial crisis has not yet fully unravelled and there are still differences of opinion between government leaders. The principal debate being the best mechanisms to employ in terms of exit strategies following the quantitative easing programmes of the past twelve months. Furthermore, there have been concerns over medium-term dollar weakness. These two factors together have helped boost the price of gold, although the actual mechanics revolved largely around fund buying that precipitated the election of stop-loss buy orders (largely short covering). Gold has tested the $1,000 level, but has yet to develop the energy to clear that level. <br /><br />Covered warrants have been reflecting the rise in the gold price above the $1,000 mark and provide opportunities for investors, be they bullish or bearish. If you think the gold price is likely to keep rising, then you could look to buy a call covered warrant on the precious metal with an expiry date of March 2010 and a strike price of $1,100. This warrant has seen a 35 per cent rise in price since the start of September. Because the maturity is six months away your view has more chance to be realised and you won&rsquo;t suffer too badly from deterioration in time value. <br /><br />However, if you think that the rally will continue, or that gold has been overbought, then you could choose a put warrant, again with six months until expiry and a strike of $900. Adventurous traders who believe gold will see a short-term retracement over the next month or so could buy a put covered warrant with a strike price of $900 and a maturity date of December. But because of the high gearing &ndash; approximately 12x &ndash; and the fast deterioration in time value, it would be a very risky strategy.