Gold Prices Weaken Awaiting Fed

After a swift surge in late March and early April, gold prices have turned around, losing some 2 percent in the past two weeks. And the pros say that with a general lack of fear in the market, there’s little reason to jump into the yellow metal just yet.

“Equities markets are again at all-time highs and keeping safe-haven gold buying to a minimum, as there is clearly no fear,” Bill Baruch, senior market strategist at iiTrader, wrote in a note to clients.

The lack of fear is also weighing on the CBOE Volatility Index, which generally measures how much investors are willing to pay for insurance on the S&P 500. On Friday, the VIX closed at its lowest level of the year.

“If the U.S. economy or the global economy continues to improve and if the dollar continues to strengthen, I think gold prices will potentially continue to suffer,” Jimmy Lee, CEO of Wealth Consulting Group, said Friday on CNBC’s “Trading Nation.”

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza