Gold Traders Fight Equity Rally Euphoria -- Kitco's Peter Hug

KITCO NEWS -- Gold prices fell on Wednesday as the Dow hit 20,000, among hopes that newly elected U.S. President Donald Trump will unleash growth-friendly spending policies. Gold prices were trading solidly lower and back below the key $1,200 level in late-morning action Wednesday. February gold was last down $13.70 an ounce at $1,197.10.

"Gold managed to tick up to the $1,218 level yesterday before the rally in the equity market ended the momentum," said Peter Hug, global trading director for Kitco Metals. "Capital may chase the print in the Dow, at the expense of protection. Euphoria, even though possibly misplaced, or at a minimum premature, will continue to increase the risk appetite for capital and prove a negative for gold," he explained.

Hug added that options expiration tomorrow may keep gold trading around the $1,200 print, but the pressure remains to the downside. The $1,197 level now becomes the support line, with $1,208 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.