Gold Should Be 'Schmoozing' With $1,300 - This Is Why Its Not Says Expert

Kitco News -- Gold prices ended the U.S. day session modestly lower Tuesday, as a rebounding U.S. stock market this week is pulling money away from the safe-haven gold market. The yellow metal is seeing follow-through selling from the shorter-term futures traders, after the solid losses seen on Monday. The recent rebound in the U.S. dollar index has also been a bearish force working against the precious metals bulls the past few sessions explained, Peter Hug, global trading director for Kitco Metals. June Comex gold futures were last down $4.80 an ounce at $1,261.90.  'Everything being equal, gold (GLD) - Get Report should be schmoozing with the higher $1,290's, Hug said. But this week's news that the Bank of Japan warned that intervention to stop the strength of the yen was being seriously considered, took the wind out of the yen/dollar cross, increasing the dollar's value by approximately one percent,' Hug explained. "The macro scenario remains constructive for gold but the short-term trend is tied directly to dollar movements - $1,265 needs to hold and the $1,288 level remains overhead resistance," he said.

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