Gold bulls had a rough start to the week as the yellow metal has been selling off due to the strength in the U.S. dollar and signs that Greece is nearing a deal with creditors. For most of 2015, gold has been trading in range around $1,200 as it struggles to find conviction to the up or downside as interest rate hike speculation and Greece’s ability to pay debt is trumping fundamentals. It has mostly been more of a technical trade. Tom Vitiello of Aurum Options Strategies tells TheStreet’s Jill Malandrino gold looks weak but there are not enough long holders in here to give that collapse down to the bigger support level of $1,164. The pattern is more of a step ladder type, and until gold breaks through the longer-term support level of $1,140, Vitiello does not see any panic selling. Greece is another scenario where we will see more can kicking, but Vitiello says interest rate hikes are really the key as he expects more volatility to enter into the market because each FOMC meeting will now have three outcomes: hike, lower or stay the same. Also it will be an indicator to see how much interest rate hikes are priced into the gold market and what immediate direction to the up or downside it will take. Vitiello says there is not that much interest in gold now because there is not much fear in the overall market since traders are used to this type of news. From a technical perspective Vitiello is looking at $1,164 then $1,140 to get involved on the short side, and on the upside he is looking at $1,120 before getting convicted to the long side.
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