This week it was gold’s turn to break support and move dramatically to the downside. As seen below major support for GLD appeared to be around 114.50 – that failed to hold last week.
GVZ showed what commodity oriented volatility does when support or resistance levels are violated, it moved up quickly. GVZ was up over 32% last week to move into the 20’s.
Oil is still low, but not doing a whole lot as far as price changes go, the result was a slight move lower in the spot index. Do note that OVX is still in the 30’s which might not be comforting for anyone hoping for the status quo in oil prices.
The cures are in slight backwardation which is the shape of uncertainty or continued volatility. Developing a new price support level would be the first step toward a return to contango for either gold or oil.