The price of gold appears to have taken a break from the latest run up. GLD was down only 0.07 on the week which may basically be considered a flat week. When there is not a lot of price movement in the underlying we tend to see a drop for the implied volatility of the option contracts. That was the case for GLD options as GVZ lost about 2% on the week. Something more interesting to me was the behavior of GVZ futures and the flattening of the curve. Futures dropped more than the index which means the market believes more calm is on the horizon for the price of gold. Remember, unlike volatility on equity market indexes, GLD volatility moves up with price movement higher or lower from the underlying market.
The price of oil and oil volatility both dropped last week and things appeared to politically calm down a bit in the Middle East. Although OVX dropped by over 2%, it is still elevated relative to other tradable volatility indexes. There is always a political risk premium (sometimes high and sometimes low) related to the future price of oil and OVX is a great way to try and quantify that. At 32.45 it appears the political risk is still there.