As the crisis in Ukraine subsided and the Fed indicating interest rates will eventually go up put pressure on the price of gold for most of the week. Despite rising about half a percent on Friday the SPDR Gold Shares ETF (GLD – 128.45) lost just about 3.5% on the week. The fund is still up about 10% for 2014. Note that despite a big drop in the GLD fund, gold volatility was lower as well. The CBOE Gold ETF Volatility Index (GVZ – 16.43) was down in sync with the price of gold. It is not all that uncommon for GVZ to move in the same direction as GLD, but when there is a big move like last week it makes me pause for a moment. My thinking is that volatility players are not too concerned about last week’s price action signaling the end of the steady up trend for the price of gold that has been in place in 2014.
The United States Oil ETF (USO – 35.84) was up slightly this past week after being under pressure on Monday post the election in Crimea. As that situation seems to have calmed, at least for the moment, volatility dropped as well. The CBOE Crude Oil ETF Volatility Index (OVX – 19.46) was down slightly with what could be considered a small drop in geopolitical risk component in the price of oil.