Why Gold Is Grounded

This ought to be a great time for gold.

Interest rates are generally low around the world, and major central banks have quantitative easing programs in place. Those conditions mean gold's lack of yield is less of an issue, and they usually translate to higher gold prices. Just not now.

Amelia Bourdeau, director of foreign exchange at Westpac Institutional Bank, says the Federal Reserve is to blame. The meeting minutes released last week showed a hint of hawkish sentiment at the central bank, and she told CNBC's Melissa Lee that was enough to spook gold buyers since the Fed is "the mainstay behind the higher gold trade."

But a currency is giving hints that gold may be getting ready to rise.

Brian Kelly of Shelter Harbor Capital points out that over the past few years, the yellow metal usually has been closely correlated with the Australian dollar. But lately, the two have diverged, with the Aussie rising and gold stuck.

The Aussie has maintained a nice base, Kelly says, and he expects the divergence between the Australian dollar and gold to shrink, so "a better way to play this is being long the Aussie dollar versus short U.S. dollar." Kelly also points out that Australia's central bank governor recently said there is already plenty of stimulus in the economy, indicating the country is unlikely to cut rates anytime soon, which should also support the currency.

Kelly wants to buy the Aussie against the dollar right around current levels, at 1.0300, with a stop at 1.0200. "I think you could go to at least 1.0800, maybe even higher from there, but let's just use a three-to-one ratio and go to 1.0600."