Trading in gold has been more centered around interest rate hike speculation rather than movement in the U.S. dollar, Tom Vitiello of Aurum Options Strategies tells TheStreet’s Jill Malandrino. Following the better-than-expected non-farm payrolls data last week, gold took a hit down to the low $1,160s since the report suggests that there is momentum in the labor market and the economy is slowly making a recovery, which is bearish for gold because there is speculation the Fed may raise impose an interest rate hike. Vitiello believes gold will continue to trade in a range around $1,200 until there is some resolution with the timing of an interest rate hike. As is the case with any type of market, traders do not like uncertainty because it makes it very difficult to establish a trend. There is speculation on how the market will respond to an interest rate hike and this is where the uncertainty lies. Vitiello says some traders expect the gold market to come down, but that it could bounce very quickly because the news is priced in. Once the interest rate hike occurs, traders will be able to more easily discern what direction gold may take.
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