Strap in, Gold is Getting Bumpy

Goldbugs should strap in because the market is starting to rock.


Way back on September 27th, I noted that gold volatility seemed tame in comparison to both the general interest in gold and the implied volatility of the S&P 500 index as measured by the VIX .

At the time, implied gold volatility was trading around 18% and the VIX was at 22% — today, CBOE/Comex Gold Volatility Index made a 52-week high north of 27% and has backed off closer to the 22% level. Higher volatility means higher premiums for options — good for goldbugs looking to take a little money out of the market and sell some calls.

Also worth noting, volume is way up on the Proshares Ultrashort Gold ETF . Proshares Ultrashort is currently trading about 3-times its 10-day average volume of 244 thousand shares and about 4-times its 3 month average volume of 187-thousand shares.

Seems all those gold bloggers calling for a correction may get their wish.