This Week in Gold and Oil Volatility – 10/18/2013

Despite forecasts of a big drop in the price of Gold the SPDR Gold Shares (GLD – 126.85) continues to hold in the mid-120’s range.  That price stability along with a drop in volatility in other markets put some real pressure on CBOE Gold ETF Volatility Index (GVZ – 21.43) which was down over 17% on the week.  Also, the return to ‘normalcy’ for the GVZ curve was an interesting and unexpected development.

The oil market suffered from lower prices.  However there was a lack of volatility associated with the government shutdown.  I checked with an oil trader and found out the US Energy Information Administration did not release inventory numbers that tend to drive trading this past week and the result was even more muted trading action.   Maybe with the resumption of inventory reports we will get a bit of a resumption of volatility in the price of oil.

GVZ OVX

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Russell Rhoads, CFA

CBOE Options Institute

Russell Rhoads, CFA, is a Senior Instructor with the Options Institute at the Chicago Board Options Exchange. He joined the Institute in 2008 after a career as an investment analyst and trader with a variety of firms including Highland Capital Management, Caldwell & Orkin Investment Counsel, TradeLink Securities and…

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