The price of oil remains a bit elevated based on extra perceived risk in the Middle East. Despite the price of a barrel of oil well over $100, the lack of follow though from previous moves higher resulted in OVX backing off slightly last week.
The price of gold woke up a bit with a move to the upside this past week of over 3%. This woke GVZ up for a moment (see 6/19 on the chart below) and then GVZ went right back to sleep. Over 80% trading days in 2014 have seen GLD close between 120 and 130, until we get a real break of one of those prices GVZ will probably remain at depressed levels.
The OVX curve tells an interesting story – the spot index dropped last week – but all three futures contracts rose. That’s market nervousness pushing volatility higher which could be taken as an outlook for higher oil prices before the summer is over. On the other hand (when did I become an economist?) the GVZ curve basically says more of the status quo for GLD meaning the 120 to 130 price range is expected to hold.