This Week in Gold and Oil Volatility – 5/31/2013

The price of gold as indicated by the SPDR Gold Shares ETF (GLD – 133.92) was in flux this week with about a five point range, but settled the week up slightly.  It appears that the 130.00 level is holding as support ever since the headline grabbing drop on April 15.  GVZ has continued to trend lower after a brief stop in the 30’s.  The futures curve continues to flatten as June, July, and August futures have remained at a discount to GVZ since the eight standard deviation move six weeks ago.

As summer driving season is upon us there may be more hope of some big moves in the price of oil.  Volatility for the United States Oil ETF (USO – 32.61) options rose last week despite a relative tame four day week for the underlying market.  It has been a while since geopolitical risk has been priced into USO options, but the possibility always seems to be lingering for some sort of conflict that will scare the price of oil higher in a very short period of time.