The SPDR Gold Shares ETF (GLD – 124.51) rose 0.01 last week and traded in a very narrow range for the second consecutive week. Despite the lack of price action in GLD the CBOE Gold ETF Volatility Index (GVZ – 14.52) rose about 3.4% last week. I would be a little more alarmed by this dichotomy if GVZ were not being quoted at such low levels. Although theoretically volatility indexes can go to zero there is usually a level where “it can’t go much lower”. Like a few volatility indexes, GVZ is around those price levels these days.
The price of oil continues to rise as summer driving season is upon us and Putin blames the west for the problems in Ukraine. Oil futures trading in the 104’s this week pushed OVX up 3% as well.
Both GVZ and OVX were higher, but the respective futures all traded lower. The term structure curves flattened a bit, but still remain in contango for the moment.