This Week in Gold and Oil Volatility

The gold market and gold volatility were everyone’s focus on Friday as GLD lost 4.7% and GVZ gained a record 39% on the day.  Market forecasters do not see support for the price of gold at any price level that does not involve more significant weakness.  GVZ’s rise on Friday can be considered confirmation of these concerns.   A little bit more on Friday gold trading action can be found here –

http://www.cboeoptionshub.com/2013/04/12/friday-night-special-record-day-for-gold-volatility-by-russell-rhoads-cfa/

The GVZ curve reacted in a manner that has not been seen in some time.  The index rallied up to the low 20’s while all the futures contracts closed at a discount to the index on Friday.  The interpretation here – a drop in gold prices might continue, but be short lived.  Time will tell.

Oil prices were under pressure as well last week and USO was down 2.25%.  OVX rose almost 6%, but the futures reacted in a mixed fashion with April and May climbing and the two back month futures losing value.

GVZ OVX