NEW YORK (TheStreet) -- Trading in gold has been more centered around interest-rate hike speculation rather than movement in the U.S. dollar, Tom Vitiello of Aurum Options Strategies told TheStreet's Jill Malandrino.

Following the better-than-expected non-farm payrolls data last week, gold fell as low as $1,160s because the report suggests the labor market has momentum and the economy is slowly recovering, which is bearish for gold because the Federal Reserve may raise increase interest rates.

Considering that open interest had increased on the short side, Vitiello explained there was not any follow-through to the downside as the shorts scrambled to cover. That has been the same kind of pattern gold has seen most of this year as the yellow metal trades range-bound between $1,140 and $1,230.

Vitiello believes gold will continue to trade in a range around $1,200 until the timing of an interest-rate hike is known. Traders don't like uncertainty because it makes it difficult to establish a trend, and it is uncertain how gold traders would react to an interest-rate hike.

Some traders, Vitiello said, expect that the gold prices would come down, but that they would bounce very quickly because the news would be priced in. Once an interest-rate hike occurs, traders will be able to more easily discern what direction gold may take.

Vitiello thinks that gold as a safe-haven trade has become muted as traders are used to interest-rate and Greek- default headlines. Gold needs fear in the market to really catch some momentum higher.

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