from Kitco NEWS
The U.S. dollar bounced and knocked the wind out of gold’s momentum, with the metal trading down Wednesday. However, Kitco’s Global Trading Director Peter Hug says he doesn’t expect this downturn to last. ‘I think it’s likely a temporary phenomenon but the thing that’s lacking here is momentum follow through,’ he told Kitco News Wednesday. After hitting a five-week high earlier in the week, June Comex gold futures settled the day 1% lower at $1,248.30 an ounce. Meanwhile, the U.S. dollar index moved up 0.7% on the day. The veteran trader said he is also closely watching the dollar’s relationship to the Japanese yen as it may have implications for the gold price. However, Hug seems most bullish on silver, although he is not quite convinced. ‘I’m almost there but I’m looking to be aggressive silver once I get the sense that economic activity is starting to turn and I still don’t have that sense out of Europe,’ he said. May Comex silver continued to trade at a 5.5-month high Wednesday, settling the day at $16.325 an ounce. ‘This may be a false breakout from a ratio perspective to gold but should we get any further good economic data out of China especially – and Europe to some extent – I think silver is undervalued relative to gold and we could see silver breakout to the upside.’
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