Gold Price Volatility Is ‘Ridiculously Low,’ SocGen Analyst

Societe Generale’s Andrew Scott discusses the volatility in gold and oil prices on “Bloomberg Markets: The Close.” (

gold volatility

Image source: Bloomberg Video Screenshot

Gold Price Volatility Is ‘Ridiculously Low,’ SocGen’s Scott Says

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I think it's ridiculously low. If you look at the very short term macro narrative and make sense we've got a bit of an appeasement with risk. The Fed puts being reasserted. We saw what the ECB did this morning but if you think on a slightly longer time horizons there's an awful lot of risks that remain unresolved and you know every client I meet is looking at aU.S. recession. Just around the corner. Growth expectations really really coming in gold volatilities in the first percentile over kind of two three year time horizons. And to me that that just seems emotionally wrong.

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Clearly bearish the dollar is when you own gold and you own oil in these trades. You rewind six months ago and think about the most overwrote and trade on the planet was the S&P. It was the most uncomfortable long. Fast forward to today and that's actually the U.S. dollar. And again it's exactly the same reasons there's just not a credible alternative. So I don't feel like people are in love with the dollar. They just don't know which country to pick against. And actually buying commodities that have been beaten up is a great way to be short dollars but not to select a specific country.

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The pickup in gold and the pickup in allocation it follows gold volatility very neatly. But this small selloff gold vault collapsed and that very nice correlations start to break.

So turning to your trade idea and bringing oil?

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I think it's a nice way to get a tail hedge on the portfolio.



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Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver