This Week in Gold and Oil Volatility

The price of gold rose last week and the SPDR Gold ETF (GLD – 168.44) closed the four day week just over 2.5% higher. The behavior of the volatility of GLD options relative to the behavior of volatility on equity indexes continues to fascinate me. With GLD higher, GVZ also climbed on the week to 18.95 for a rise of 6%. All four futures contracts gained as well which indicates the futures market believes more volatility is on the horizon for the price of gold. 

The United States Oil ETF (USO – 35.88) lost 0.01 this past week. However, the implied volatility of options was higher by about 4%. In a strange turn of events, the curve of OVX futures prices shifted in an unusual manner. September and October futures dropped on the week while November and December futures were up slightly