Last week I watched Gettysburg on the History Channel. Over a two hour period the three day Battle of Gettysburg was reenacted and discussed. Basically the Confederate army tried to break the line of the US army. Despite coming very close, the US army held the line. That is sort of how the price of gold seems to be acting. It appears (and pundits keep pointing out) that the price should break support and head to lower levels. Despite continuing to appear like it may break support, the SPDR Gold Shares ETF (GLD – 120.70), just can’t break through. The result of support being maintained, along with a fairly quiet week was a drop in GVZ and a uniform drop in the futures curve as well.
Leading up to the deal that was struck with Iran over their nuclear program OVX had been under pressure. It appears there was a feeling that there would be an adjustment of the risk premium surrounding the price of oil. However, as soon as the deal was signed (or the Monday afterward), OVX turned higher and maintained those levels.