Gold Weakness a Buy-Sign; Not An End For The Bulls - Trader

Gold prices ended near unchanged Tuesday, after hitting a 3 1/2 month low overnight.
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Gold prices ended near unchanged Tuesday, after hitting a 3 1/2 month low overnight. The metal is finding buying interest at the $1,200 level, after it tested and held support at this level over the holiday weekend, says Kitco's global trading director Peter Hug. 'Selling emerged after Janet Yellen indicated that recent economic data should support a rate hike this summer,' Hug told Kitco News on Tuesday. He added that Yellen hinted that such a move would be dependent on continued improving data. 'This week is loaded with data points, beginning today with U.S. April personal spending and as well as consumer confidence data. The big number on everyone's radar is Friday's employment data,' Hug said. The veteran trader is sticking to his instinct that it remains unlikely that the Fed moves in June, ahead of the Brexit vote and given recent data out of Europe. '[T]here remains a better than equal chance, the Fed will not move at all over the summer. That said, the anxiety of a potential rate increase has taken the edge off gold but the weakness should be considered a buying opportunity, not a signal that the bull run has ended,' he noted. August Comex gold futures settled at $1,217.50 an ounce, relatively flat on the day.

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