With little fanfare the price of gold closed lower than the price level that caught everyone’s attention back in April. 131.31 was the close for GLD on April 15th and the low that day was 130.51. I guess 130.51 is about the only thing that may be considered ‘support’. We may just find out how much support there is at this price level on Monday. For some reason I keep envisioning a bubble being blown that is gently floating in the breeze before landing on a sticker bush and violently popping. That’s my personal image of what seems to be going on in the gold market. With this drop in GLD GVZ worked its way up to the upper 20’s rising over 18% and the May futures following suit. With May having only two days remaining until expiration next week it will be interesting if GVZ comes down to the futures price or if the futures rise up to the index.
For the second week in a row, the oil market is a complete contrast to gold. USO was up a whopping 0.07 on the week and OVX was down 0.01 while the curve became a little steeper. Maybe farther dated oil options are anticipating a rise into the summer driving season and this is showing up along the futures curve.