The gold market is on its heels to begin the new trading week, with appetite for risk taking a bite out of the yellow metal’s appeal. Gold is once again finding itself on the defensive following another failed probe higher, and for now it appears that perhaps the market is quite comfortable in its recent trading range.

Weaker crude oil prices, higher stocks and a slight rebound in the dollar index are all likely weighing on gold currently, and the prospect of additional rate hikes from the Fed is not doing the market any favors either.

That being said, however, the Fed may take a more cautious tone in the coming weeks and months, and if no major legislation is passed in the U.S. regarding tax cuts and infrastructure spending investors may become considerably more anxious.

Although the Fed recently stuck with its plans of another rate hike this year, some recent weakness in key pieces of economic data and falling oil prices could give the central bank reason for pause.

The oil market has been a major story in recent headlines, as prices have slid to their lowest levels of the year in the low $40s per barrel. Crude oil is often considered a barometer of overall economic activity, and the energy sector-with its large market cap-has a tendency to lead the market whether the direction is up or down.

Lower oil prices may weigh heavily on energy shares and could potentially be a catalyst for a long-overdue market correction. Falling crude prices are also another primary example of the lack of inflationary pressures currently being seen. This represents yet another conundrum for the Fed, as inflation remains stubbornly below the central bank’s 2% target.

For the time being, investors will likely take a wait-and-see approach to the markets, and the path of least resistance in stocks still remains higher. Many analysts, however, are sounding alarm bells about current stock valuations, and the equities market could be getting closer to a major reversal.

The gold market may simply bide its time until a fresh catalyst for higher prices presents itself. The U.S. could see the next economic recession take hold in the coming quarters, and numerous geopolitical issues could also potentially fuel a risk-off mentality.

Stock investors have been relatively patient thus far, but will likely want to see some key pieces of legislation passed by the Trump administration in order for the bull market to continue.

If, or when, the stock market begins to show significant signs of weakness, gold could potentially see significant inflows that could fuel an upside breakout and send prices sharply higher from current levels. The Fed could find itself in a precarious position if stocks begin to falter, and the path of rate hikes could potentially be slowed even further-or even cease altogether.

In fact, you could certainly make the argument that the Fed may simply be raising rates in order to have the ability to lower them again if or when necessary. The notion of an ongoing period of lower rates may keep a floor under gold prices, and gold could see significant upside if the Fed is forced to change its current trajectory regarding monetary policy.

The gold market is getting off to a sluggish start to begin the new trading week. A lack of any fresh, bullish inputs is likely weighing on the yellow metal while also giving some investors reason to book profits.

Although investors will continue to monitor numerous geopolitical issues including the recent U.K. elections and North Korean saber rattling, they will also have plenty of economic data to chew on this week. In fact, U.S. markets will see the latest releases of several key pieces of economic data including PPI, Retail Sales, Empire State Manufacturing, Weekly Jobless Claims and more.

The biggest potential market mover for the week will almost certainly be Wednesday’s FOMC meeting conclusion. It is widely expected that the Federal Reserve will hike interest rates by another 25 basis points-although some analysts have suggested that a surprise could potentially be in store.

The question is whether or not the central bank could decide to delay further tightening until their next meeting. Some recent weakness in key economic data points, along with some signs of cracking in technology stocks could possibly give central bankers something to think about before pulling the trigger on another rate hike.

For the most part, the central bank has stuck to its guns regarding its plans for normalizing monetary policy. There are numerous issues, however, that could force the Fed into rethinking its plans going forward.

Gold has been seeing some steady buying once again in recent action, as geopolitical jitters fuel some flight to safety buying. The market has, however, failed to move above the $1300 level once again-at least for now-and may need to see some upside follow through to attract more fresh buying interest.

The stock market could potentially hold the key to higher gold in the near-term. Recent weakness in the tech sector could potentially be indicative of market exhaustion, and numerous analysts continue to suggest that valuations are at unsustainable levels.

A significant breakdown in stocks could prove to be the catalyst for a major upside breakout in gold and other perceived safe haven assets. Such a breakdown could be driven by several key factors including valuations, geopolitical fears and a perceived lack of progress on the fiscal stimulus front.

The dollar index will also likely be a major factor in the near-term, as the greenback has been trending lower for some time now and has yet to show any significant signs of bottoming out.

The weighted year-end average call for the 10 year treasury yield has also declined again, now standing at a yield of 2.7%. This estimate represents a decline of about 20 basis points from just two months ago, and seems to indicate investors believe that following a hike this week the Fed will then sit on its hands until December.

Numerous political distractions are likely a major factor in lower inflation expectations, and such distractions are likely to be unresolved for some time.

Lower yields, a more dovish Fed and the potential for a stock market reversal may all fuel further upside in gold in the coming weeks and months.