The Market Ear

Gold itself is a hedge, and gold volatility trades with an "upside skew" when it comes to gold volatility, ie gold up big is usually accompanied with gold volatility moving sharply higher. We have not seen such a violent 2 day move in gold volatility in a very long time. Chart two shows the "old relationship" is back. Volatilities at these levels offer great overwriting trades for the ones that think we are about to have a pause in gold, but still want to be long the metal.