Gold is supposed to be one of those markets that will display a lot of volatility when there is turmoil in the world. I think the situation between Russia and Ukraine should at minimum qualify as ‘turmoil’. However the gold market and gold volatility aren’t buying it, at least not yet. The price of gold, as represented by the SPDR Gold Shares ETF (GLD – 125.43) was up slightly on the week and did close near the high of the week on Friday. However, despite the sell-off in the equity market being blamed on Russia, a similar move was not witnessed in GLD or GVZ.
Oil is another market that would be expected to rise on global tensions, especially when one of the players involved (Russia) is a large energy exporter. However, just like gold and gold volatility the CBOE Crude Oil Volatility Index (OVX – 18.88) didn’t show much concern about a big move on the horizon for the price of oil.
The curve action mirrored the indexes and was exceptionally quiet. If things continue to escalate in Ukraine I assume that GVZ, OVX, and their respective futures markets will start to show concern. However, at this moment the markets are pointing to that situation not having much of an impact on the respective markets.