(Kitco News) - Gold was off to a good start this year but has not rallied in the face of recent volatility in equity markets. Bill Baruch, president of Blue Line Futures, said that a lot of gold's rally in the new year was due to seasonal factors.

"Ultimately, I do feel that there is a seasonal play," Baruch told Kitco News, "people look for that time to reinvest or purchase gold as they look at and re-evaluate their portfolios."

Gold has not been rallying on the back of stocks falling because investors are selling gold to cover margin calls, according to Baruch.

"People position long gold ahead of a stock market correction, and not necessarily buying gold after a stock market correction," he said, "and because of that, after a correction, people have to rebalance their portfolios; assets come out of gold in order to meet margin calls in stocks."

Baruch said that gold is currently in a bull phase and maintains his bearish dollar view in the long run.

"Ultimately, I think there's going to be a really great buying opportunity here for gold," he said, "the dollar index, I'm watching very closely, it has a little bit more upside, right around 91.75 - 92, and on the downside, the euro is a big part of that trade, and I think there's a lot of support in the euro around 122"

Baruch said that he is waiting for the currency side of the trade to get to gold-bullish levels. "The currencies were really a big part in why gold rallied in January; the dollar got clobbered," he added.

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This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.

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