DRDGOLD Plunges 9.2% Amid Volatile Precious Metals Market—What’s Fueling the Selloff?

Summary
• DRDGOLD (DRD) trades at $32.215, down 9.23% intraday
• Intraday range spans $34.28 high to $31.59 low
• Sector leader GOLD.com (GOLD) falls 3.98% as gold prices retreat

DRDGOLD’s sharp selloff mirrors a broader collapse in precious metals, driven by President Trump’s nomination of Kevin Warsh as Fed chair. The move has eased fears of dovish monetary policy, triggering a 10%+ drop in gold and silver prices. With DRD trading near its 52-week low of $10.17, traders are scrambling to assess whether this is a short-term correction or a structural shift in the gold sector.

Gold Sector Volatility Drives DRDGOLD’s Sharp Decline
The selloff in DRDGOLD is directly tied to the collapse in gold and silver prices following Trump’s Fed nominee selection. Kevin Warsh, a hawkish figure, has allayed concerns about rate cuts, stabilizing the dollar and undermining the case for gold as a hedge. This triggered a 10%+ drop in gold futures and a 25% plunge in silver, dragging DRD down with the sector. Technical indicators confirm the bearish shift: the stock is now below its 30-day moving average of $33.78 and trading near the lower Bollinger Band at $29.29.

Gold Sector Reels as GOLD Leads Downward Slide
The gold sector is in freefall, with sector leader GOLD.com (GOLD) down 3.98% intraday. DRDGOLD’s 9.23% drop far outpaces the sector’s average decline, reflecting its higher sensitivity to gold price swings. While GOLD’s -3.98% suggests a moderate correction, DRD’s move indicates deeper technical breakdowns, including a 52-week low breach and a short-term bearish trend confirmed by its RSI (61.26) and MACD crossover.

Options Playbook: High-Leverage Puts and Calls for DRDGOLD’s Volatile Outlook
• MACD: 1.76 (bullish divergence fading)
• RSI: 61.26 (moderate bearish momentum)
• Bollinger Bands: $40.24 (upper), $34.77 (middle), $29.29 (lower)
• 200-day MA: $22.11 (far below current price)

Technical indicators suggest a short-term bearish bias, with key support at $30.35 and resistance at $34.77. The stock’s short-term bearish trend clashes with its long-term bullish setup, creating a volatile trading environment. Two options stand out for directional bets:

• DRD20260220P32.5 (Put):
- Strike: $32.50, Expiry: 2026-02-20
- IV: 62.36% (moderate)
- Leverage: 14.92% (high)
- Delta: -0.4979 (moderate sensitivity)
- Theta: -0.0166 (slow decay)
- Gamma: 0.0812 (high sensitivity to price swings)
- Turnover: $27,375 (liquid)
- Payoff at 5% downside ($30.60): $1.90 per contract
- This put offers high leverage and liquidity, ideal for capitalizing on a potential breakdown below $32.50.

• DRD20260220C35 (Call):
- Strike: $35.00, Expiry: 2026-02-20
- IV: 70.23% (elevated)
- Leverage: 27.90% (very high)
- Delta: 0.3416 (moderate)
- Theta: -0.0602 (rapid decay)
- Gamma: 0.0663 (moderate sensitivity)
- Turnover: $3,376 (liquid)
- Payoff at 5% downside ($30.60): $0 (out of the money)
- This call is a high-risk, high-reward play for aggressive bulls expecting a rebound above $35.00.

Action Alert: Aggressive short-sellers should target the DRD20260220P32.5 put for a 5% downside scenario. Bulls may consider the C35 call only if DRD breaks above $34.77 and retests the 52-week high of $39.37.

Backtest DRDGOLD Stock Performance
The performance of DRD (Dillard's) after a -9% intraday plunge from 2022 to now has shown positive returns, with the 3-Day win rate at 52.05%, the 10-Day win rate at 53.48%, and the 30-Day win rate at 58.20%. The maximum return during the backtest period was 11.41%, with a maximum return day at 59. This indicates that DRD has a higher probability of positive returns in the short to medium term following a significant pullback.

Act Now: DRDGOLD’s Volatility Demands Tactical Positioning
The selloff in DRDGOLD reflects a sector-wide correction in precious metals, driven by Trump’s Fed nomination and stabilizing dollar. While the stock’s long-term bullish setup remains intact (200-day MA at $22.11), short-term technicals favor a bearish bias. Traders should monitor the $32.50 support level and the sector leader GOLD.com’s -3.98% move for directional clues. Immediate action: Short-sellers with a 5% downside thesis should prioritize the DRD20260220P32.5 put, while bulls must wait for a confirmed rebound above $34.77 before initiating longs.