This Week in Gold and Oil Volatility – 1/17/2014

The United States Oil ETF (USO – 33.69) was up 0.50 on the week and it appears the only day the price of oil had any action was on inventory Wednesday last week.  The net result of the continued quiet oil market was lower option volatility and the CBOE Crude Oil ETF Volatility Index (OVX – 17.12) dropping just over 12%.  OVX is still above December lows, but do note that CBOE has OVX data going back to 2007 and the average OVX close over the last six years has been more like 37.50 than in the 17’s.

The price of gold continues to defy the vocal bears and inch higher.  We often talk about historical VIX numbers in the context of seeing post-2008 lows.  For the price of gold a similar benchmark can be April 2013 when the SPDR Gold Shares ETF (GLD – 120.93) lost just over 13% in two trading days.  The CBOE Gold ETF Volatility Index (GVZ – 14.34) closed on Friday at the lowest levels since that event.  The chart below does not include that big price drop, but does show some support that seems to have held despite a couple of attempts by the gold bears to push the price to another leg down.

Gold Chart

Despite being the author of that page turner, Candlestick Charting for Dummies, I do not claim to be a master technician.  However, the support line in the 114 – 115 range for this weekly GLD price chart is pretty hard not to miss.  Also, do note that over the last three weeks the price of GLD has put in higher lows and higher highs.  I’m pretty sure that means something to the bullish gold traders out there.

GVZ OVX