The SPRD Gold Shares ETF (GLD – 126.95) was unable to develop support in the 130’s and returned to a price range that has been ‘home’ for a month or so – the upper 120’s. The low this year is 114.68 and a breach of that price would bring out the gold bears in force. There are several voices calling for lower gold prices and a new 2013 low would result in an awful lot of self-congratulatory commentary. Also, a break in price would probably be proceed by a run up in gold volatility as the level is approached along with a spike while the price of gold searches for a new support level. The parallel shift in gold volatility trading last week indicates some creeping nervousness regarding the prospects for GLD.
The United States Oil Fund (USO – 34.13) stair stepped lower throughout the week. The lower price action was fairly orderly, but did result in OVX rising by almost 5%. The front month November contract traded up by 2.51%, but the other futures contracts were mixed which indicates a little near term concern, but longer term volatility expectations are relatively tame.