The gold market is down sharply in early action Monday. Spot prices are down about $23 per ounce in the early going as some investors book profits following gold’s recent run higher. The chart consolidation being seen this morning is not only completely normal but may also be necessary before the metal can sustain another leg higher. The market has lost the $2,000 level this far, however, it could prove to make things more challenging for the bulls.

Key outside markets today are seeing the Dollar Index firmer. Crude oil prices are steady at just under $81 per barrel and the 10-year Treasury is yielding 3.383%. The only market possibly having an impact on gold today is the dollar. The currency may see renewed pressure in the coming days and weeks, however, if talk about China and other nations moving away from it continues.

Although many investors likely took Friday off for the Easter Holiday Weekend, the markets did get the latest release on non-farm payroll data. It showed a rise of 236,000 jobs versus the February gain of 311,000 jobs. The gain on Friday still falls into the camp of the policy hawks, however, and could give the Fed more reason to consider hiking rates even further.

The market may be fairly quiet until the major data point of the week on Wednesday. That day will bring the release of the latest Consumer Price Index (CPI). for March. It is expected to show a rise of 5.1% versus a rise of 6.0% for February. A big miss in this report Wednesday could be market moving. If inflation is hotter than expected, it may reinforce the notion that the Fed has more work to do on rates and that rates will be moving higher yet. If the data shows slower-than-expected inflation, it may boost hopes for the Fed being done or even reversing course on interest rates sooner rather than later.

As worries over a recession increase, inflation and other data become even more important. The data stream will be closely scrutinized by the investing public in the months to come. Better-than-expected data may no longer be viewed as being hawkish, and markets may celebrate good news as being actually “good news.” Major misses in the data may pose a greater risk of recession, however, and could give investors reason to flee stocks and risk assets. Of course, there are also geopolitical risks being seen around the world now also.

The gold market is a bit lower in mid-morning action Friday. The spot price is down by $3 per ounce in quiet trade thus far. Despite the day’s declines, however, the market remains very close to the $2000 mark and will likely test this area early next week. The combination of an increasingly dovish Fed and bank worries may keep gold well supported in the weeks ahead.

Recent economic data has also been bullish for the yellow metal. Durable Goods Orders, released earlier today, showed a decline for the fourth consecutive month. As weakness in the manufacturing sector gains steam, more investors may become worried over the possibility of a recession coming. Not only that, but a slowing economy may also mean that the Fed is at or very close to the end of its tightening cycle. The Fed did raise interest rates again this week by 25 basis points, as expected, but also signaled it would not be hiking rates again any time soon.

The end of the current rate hiking cycle may not only provide investors a sense of relief, but it may also give them a degree of clarity that had been lacking for some time. This clarity may allow investors to make moves they otherwise would not and could put gold and other markets onto sustainable trajectories for the months ahead. If the Fed were to signal that they may see the need to start cutting rates again, look out. Gold and stocks could see a significant upside while the dollar gets clobbered. Whatever the case may be, the Fed and its plans for rates could hold the keys to higher gold and higher equities. For the time being, the $2000 level will act as an important resistance barrier for gold.

If the gold bulls can take out the $2000 level on a closing basis, the stage could be set for a rapid rally higher that could see gold back at all-time highs in a short period. If the bulls fail to take out this level, however, the bears could gather some strength and potentially drive the market lower to the $1900 level. The bears will not have anything of substance going until they take out $1800 on a closing basis. Within the market not far from previous all-time highs at this point, logic could suggest that a test of those highs may be seen before any significant downside is. Whatever downside does come along may not be enough to deter the bulls from taking the market higher over time. Any significant dips are likely to be bought aggressively, for the time being, and this may keep the metal from falling too far too fast.

The next several sessions may be critical for gold as it attacks the $2000 level. Given the current backdrop, however, the market could find reason to move higher and do so quickly if another bank runs into trouble or signs of contagion appear.

The gold market is slightly higher in early action Wednesday as investors await the release of the latest FOMC meeting minutes this afternoon. While there is no guarantee that the minutes will move markets, past meeting minutes have done exactly that and today’s have the potential to do so as well. The Fed has stuck to its plans for higher interest rates for some time now, and with inflation still being problematic there is little reason to think the central bank would now decide to steer away from more rate increases.

The Fed’s previous rate hikes are having an impact. The effects of higher rates may be seen in recent inflation data, much of which has shown a slight easing of price pressures in recent months. While the Fed still has significant work to do, it does appear to be moving the needle in the right direction. A hawkish-sounding Fed today could set off some alarm bells while a more dovish-sounding Fed could fuel a rally in stocks and risk assets. The gold market could also benefit from a dovish Fed but it could also even find a way to rally if the Fed is more hawkish.

The gold bulls and bears are locked in a tight battle currently. The market is in a weak trend lower, giving the bears a slight advantage. The bulls need to take the metal back above the $1900 level and then challenge the $1950 area. The bears will look to take the market down to $1800 and if successful will then look for a challenge of the $1700 level. Until the bulls or the bears establish control of the market, more sideways price action may be seen.

In outside market action, the dollar is slightly lower today but may not stay that way if the Fed signals more rate hikes to come. The dollar has been a major obstacle for the gold bulls in recent months and any further strength in the dollar may keep the bulls from extending the rally. The higher the dollar goes, however, the harder it may eventually fall. If more counties look to dump dollars in the years ahead, the greenback could be hit by a tidal wave of selling that could take it sharply lower from recent levels. If such a scenario were to develop, the gold market could see a substantial upside as the dollar sees a significant downside.

Recent stronger-than-expected data may be soothing recession fears currently. It is not soothing to those concerned about higher interest rates, however, and the Fed may decide to keep rates higher for longer as it suggested previously. This theme is likely to be a major market catalyst for the months ahead and could set the stage for either a significant rally in the price of gold or a significant and sharp downturn in the price of the metal. Both camps are prepared for whichever materializes and it may now just be a game of waiting until it does.

The gold market is higher in mid-day trade Tuesday as investors position themselves ahead of tomorrow’s FOMC meeting announcement on rates. Bulls stepped into the market earlier in the session to buy the dip seen Tuesday morning, and the market is now higher by nearly $7 per ounce as the pit session prepares to close. Trading has been somewhat muted across markets this week as investors prepare for tomorrow’s FOMC announcement and press conference. Expectations are for the Fed to raise rates by 25 basis points rather than the previous 50 or 75 points.

The Fed announcement on rates could be market-moving tomorrow. The 25-point hike is likely to do little to move markets, but the Fed’s commentary afterward could be very telling about its plans moving forward. If the Fed is seen as being more dovish, it could potentially send gold and stocks higher as hopes for a reversal on rates may increase. If the Fed is viewed as being more hawkish, however, the markets could be sold off heavily. Fed Chairman Jerome Powell is likely going to be very careful in what he says and how he says it tomorrow, and the markets could potentially come away with nothing new to go on.

The Fed’s plans are certainly a major factor for gold in the months ahead, but they are not the only factor. The war in Ukraine, the potential for a Chinese invasion of Taiwan, the dollar, and other factors may all play a role in how gold performs in the months ahead. Even with a more hawkish-sounding Fed, the gold market may see a quick rebound from any selling as investors look to buy the dips. The upcoming U.S. Presidential election may also play a role for gold as the election gets closer.

For the time being, the bulls will have to buy based on what they already know. The bulls have thus far done a good job of holding the market above the $1900 level. The next major bullish target is well within striking distance at this point, with the $1950 area only about $20 away. If the bulls can produce a close above $1950, the market could be poised to attempt previous all-time highs. If the Fed were to signal a course reversal on rates later this year, the gold bulls could not only rapidly reach previous all-time highs but could start making new all-time highs in the process. A dovish signal from the Fed could not only suggest a move towards previous all-time highs but could make $2500 or $3000 per ounce gold a reality in the months ahead.

The bears have their work cut out for them. They must first produce a close below $1900, followed by a close below $1800. The real test for the bears would likely not come unless the market were to test the upside breakout point around $1700. A close below that could send the market sharply lower, with little in the way of support until the $1500 level is reached.

There seems to be an increasing amount of talk regarding gold and its ability to return to all-time highs. The yellow metal has had a strong run over the last several weeks and is up over $300 per ounce since November. The reasoning behind gold’s strong performance seems clear enough and many investors feel it is likely to make another critical jump in the weeks ahead. The metal has already taken the $1900 level on a closing basis and thus far has been able to hold this level on the chart. Markets do not typically go straight up or straight down, however, and the gold market is no different. The metal may need to see a significant pullback before the bulls can take prices sustainably higher. When such a pullback could occur is anyone’s guess. Given the recent upside in the market, however, now or very soon seems to make a great deal of sense.

Many investors have missed the gold rally in recent weeks. The metal spent months in a tight trading range before finally breaking out at the $1700 level. What is to say that the metal could not spend another several month’s trading sideways, only in a higher range? The answer to that question is nothing. The markets are awaiting the Federal Reserve’s decision on rates next week before making any big moves. The decision on rates isn’t even the most important thing. What is important is what the Fed says about its plans going forward. The central bank does not want to overtighten and be forced to begin easing again too soon. The Fed is likely, therefore, to take its time rising rates to the desired level in the first half of the year. This fits into the Fed’s plans to leave rates higher for longer.

Although the Fed is unlikely to provide any clues about its easing plans, it is likely to signal a move towards easing possibly in the second half of the year. Inflation data has been coming down, and although it is still very elevated, it is moving in the right direction. This would seem to suggest that the Fed’s actions are working. Now forced to walk a tightrope, however, the Fed will look to be especially careful as it implements its desired policy. That caution could be reflected in the central bank’s commentary over the next few months as it may look to provide little if any, useful information for investors.

The market may remain range bound until more clarity is seen from the Fed. The bulls need to produce a close above resistance at the $1950 level. The bears are looking to produce a close first below the $1900 level and then at the $1800 level. The metal could pull back to the $1800 level before finding more solid ground on which to rally. Patient, long-term investors understand this and may be willing to step in and buy the market on any significant dips. “Good things come to those who wait,” is an important saying for gold investors and could prove to be very true for the bulls.