The action in the gold market continues to perplex me a bit. The stock market lost almost 2% and GLD was up just over 0.10%. With all the headline related market moves in the past week that impacted the stock market, gold continues to trade in a fairly narrow range. The appearance here is that the gold market is ignoring headlines and focused on fundamentals. Fundamentally the outlook many consumers of gold have is for flat prices in 2013. GLD price action and GVZ both reflect this outlook right now. GLD reflects this through very little price movement and GVZ by being close, but off, historic lows. Even though GVZ finished the week up 10%, this 10% rise was off a pretty low base. Also, the shape of the curve actually flattened a bit which indicates GVZ is pointing to calm waters for GLD over the next few months.
The only volatility trading that saw significant drops last week was in OVX. OVX was unchanged on the week, but all the futures contracts dropped as the week wore on. Oil futures have been hovering around the 90.00 level for a little while with not a lot of price action. This lack of realized volatility is working its way into OVX futures prices as well.