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[video] Quick Take: Gold's Rally May Not Signal a Trend

NEW YORK (TheStreet) -- Gold prices continued higher in the second trading day of 2014. TheStreet's Joe Deaux spoke to Peter Hug, trading director at Kitco Global, about where gold is going next. 

Despite gaining $20 on Thursday and another $10 per ounce on Friday, Hug was hesitant to say gold may have formed a new uptrend. Volume is still below average due from the recent holidays. He thinks the market had 80% to 85% of its regular traders back today. 

Hug prefers to wait for the remaining volume to come back to the market next week. He thinks the spread between platinum and gold is interesting. Platinum recently traded with a $120 premium to gold, but that spread has rapidly risen to $180. 

Although the white metal is much less liquid than gold, Hug suggested the spread has gotten ahead of itself and should soon revert back towards the $120 level. 

To take advantage, he said investors could go long gold futures and sell short platinum futures to benefit from the shrinking spread.

-- Written by Bret Kenwell in Petoskey, Mich.

Stock quotes in this article: GLD 
Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter. Focuses on short-to-intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.

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