This Week in Gold and Oil Volatility

Like all volatility markets, last week was settlement for GVZ and OVX contracts. September GVZ settlement came in at 18.52 and OVX settlement was 32.82.

Last Friday Oil Futures managed to trade over 100.00 intraday. That price level is far in the rear view mirror and the price drop also put pressure on the USO Exchange Traded Fund which lost over 6% on the week. This is a pretty big drop in the underlying, but it was accompanied by a big drop in the OVX as well which lost 2.5% on the week. In a final interesting twist in the oil volatility markets all futures settled higher on the week. This may be taken as the market saying, “Oil is down for the moment, but hold on to your hat as the ride may not be over”.

Gold prices have been on a tear to the upside lately and sort of took a break last week squeezing out a small gain for the week. The result in gold volatility was a uniform drop in GVZ and all futures contracts. Although down on the week, GVZ is still above recent prices which were in the 14 range back in mid-August.