Gold is fading fast.
The yellow metal touched its lowest level since Aug. 5 on Tuesday after falling nearly 4% in the last week on rising optimism around trade talks. Still up nearly 16% for the year, gold has seen elevated inflows in recent months as investors flocked to the historically "safe" asset amid broader uncertainty in the stock market.
But over in the options market, traders on Monday bet on more pain for one gold mining stock that closely tracks the price of gold: Agnico Eagle Mines.
"We saw about two times the average daily option volume there," Mike Khouw, co-founder and chief strategist at Optimize Advisors, said Monday on CNBC's "Options Action." "Amongst the activity that we saw, the November [$]50 puts … were very active."
One trader bought 500 of those $50-strike puts, which expire in late November, for roughly $1.20 each, Khouw said.
"The buyer of those puts is obviously making a bet that the stock's going to decline below that $50 strike price by at least the $1.20 that they paid," Khouw said.
From Tuesday morning's trading prices, that would be a nearly 7% decline for shares of Agnico Eagle Mines and a 10% fall from where the stock closed on Monday.
And while Khouw spotted bullish options activity brewing in some other gold plays, he chalked it up to traders rethinking their earlier bets.
"While we did see a little bit of bullish activity in [the VanEck Vectors Gold Miners ETF] GDX, ... some of that may actually have been just covering some short positions, taking advantage of gold's weakness," Khouw said. "I would say gold peaked, basically, ... [in] the first week of September."
Not everyone subscribed to that view, however.
"On Friday's 'Fast Money,' ... one of the things I said towards the end was this will be an important week for gold to the upside," said Guy Adami, a regular "Fast Money" trader and director of advisor advocacy at Private Advisor Group.
"I didn't think it was going to have this type of move today," Adami admitted Monday in the same "Options Action" segment. "That said, I don't think the gold move is over by any stretch of the imagination. I hear what Mike's saying, ... but I think gold is resting here."
Gold prices climbed more than 1% off their early session lows by late Tuesday morning.