Gold bugs finally found the strength to push gold slightly higher after 10 days of free fall this morning.
But is it time to buy gold? A question I’ve been asked all month.
Remember, gold is less appealing to investors in periods with rising interest rates and during these periods gold cost more to control (hold) and has no yield to pay investors while they wait for gold to return into favor.
With gold being priced in U.S. dollars and with the dollar continuing to strengthen as the Fed looks to hike rates for the first time in nearly a decade…gold will remain under pressure.
Bottom Line: I’m bearish on gold as long as the U.S. dollar (UUP, quote) continues to strengthen and an interest rate hike looms on the near term horizon. Unless Fed indicates the economy is not strengthening and backs off the notion of a rate hike I want to find other places to put money to work.