This Week in Gold and Oil Volatility – 7/11/2014

The geopolitical event of the week last week was more about the financial markets than energy, but that didn’t stop OVX from moving up by over 10%. The last OVX move higher was based on a spike in the price of oil. This one coincided with oil futures testing the psychologically important one hundred dollar level.

OVX PA 

Listening to the financial press this week you would have thought that the price of gold was ripping to the upside. I was traveling for work on Friday and didn’t get to start working on these blogs until Friday evening. I honestly was surprise to see GLD had not breached the 130.00, at least over the course of last week.

Gold Price Chart

That price level remains as an obstruction to higher prices and if GLD doesn’t break out to the upside we can expect lower GVZ levels to remain.

GVZ PA

The GVZ price curve shifted as would be expected with July expiration rapidly approaching. The index was slightly higher, but the July future narrowed the gap by dropping. In the case of OVX futures there was a pretty uniform move higher with July finishing Friday at a slight premium to August.

GVZ OVX

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Russell Rhoads, CFA

CBOE Options Institute

Russell Rhoads, CFA, is a Senior Instructor with the Options Institute at the Chicago Board Options Exchange. He joined the Institute in 2008 after a career as an investment analyst and trader with a variety of firms including Highland Capital Management, Caldwell & Orkin Investment Counsel, TradeLink Securities and…

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