This Week in Gold and Oil Volatility – 8/1/2014

When I put these numbers together for the weekend there is always something that stands out and makes me double check my figures. This week it was GVZ. For goodness sake, they are panicking, I can feel it, they are panicking out there. I was in the classroom most of Thursday and Friday, but our classroom is above the VIX pit and the yelling I heard was the kind of panicking that Eddie Murphy refers to with respect to pork bellies and traders not being able to afford the GI Joe with the Kung Fu Grip for Christmas. Well, it is my humble opinion that we don’t have a panic without gold, and GVZ says we aren’t there yet.

GVZ PA

Oil on the other hand was panicking, but not like we would expect with all the fireworks on the other side of the world. Oil futures broke support at 100.00 and USO followed by losing over 4% on the week. This breakdown in oil pushed OVX up over 16% and very close to 20.00. I’m going to say that’s more like it on the GI Joe panic scale.

OVX PA

The curves also tell different stories – GVZ, again is pretty tame. The OVX Curve, with August at a slight premium and the back months all basically in line with the index has the appearance of more uncertainty.

GVZ OVX