The Fed’s announcement (non-announcement?) on Wednesday impacted all the financial markets. Gold was a market that also reacted very positively to the continued boost to economic activity that is quantitative easing. The SPDR Gold Shares ETF (GLD – 127.96) rose 4.4% on Wednesday which was the biggest one day gain since January 2009 and the sixth biggest upside move in the history of the fund. Looking at the week over week performance of GLD one would never know there had been such a strong day since the net result for the week was a small gain of 0.14. GVZ, on the other hand showed that something happened, but the ‘something’ was more of a feeling that there should be little concern over lower gold prices in the near term since the Fed is going to keep the world afloat.
The oil market drifted lower with the United States Oil Fund (USO – 37.77) losing a bit on the week and volatility came in as well. OVX dropped about 8% and the curve moved in a fashion that resulted in a text book contango shape for the first time in a while.