Volatility in Gold and how to play the Vol Premium / DiscountAs you probably know, Implied Volatility in assets like Gold or Silver has the tendency to rise when the price of the commodity rises sharply, unlike equities where IV rises when equity's price declines.
This means in case of Gold (GLD), when V.R.P. rises, and we have a PREMIUM in Implied Volatility, participants Iin the market think price will either continue or decline significantly.
We usually have complacency when V.R.P. is negative and participant in the market feel "nothing will happen" in the near future. In this case, IF WE HAVE A TRENDING MARKET, as we saw at the beginning of April, chances are Gold will rise.
As the market looks now, I expect GLD will continue its bullish trend, and when we'll have again a big PREMIUM in Implied Volatility, to see a sharp (technical) correction, but with no threat to the trend.
p.s. for more details about the Prmium/ Discount in Implied Volatility pease check my indicator o this topic: