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The gold market is just below the unchanged line in mid-afternoon trade Tuesday. The market has been trading mostly sideways for the last few days now and appears unwilling, thus far, to stray far from the $1850 level. The bears have had a small edge in recent price action, however, and spot gold is now sitting around the $1820 level.

The yellow metal appears to be waiting on some fresh inputs before making an extended move up or down. There are numerous issues at play that could influence gold one way or the other, including the war in Ukraine and the Federal Reserve. Inflation also remains at the forefront of market attention, although there have possibly been some signs recently that price pressures may have finally reached a peak.

There have been a few major catalysts for weaker gold in recent months, and those catalysts are likely playing a role today in gold’s lack of upside. Rising treasury yields and a stronger dollar may both be bearish for the gold market. Both of these rising markets have the potential to weigh on gold even further in the months ahead. Rising yields increase the opportunity cost of holding bullion, while a stronger dollar makes gold more expensive for foreign buyers. Both of these markets are likely being strongly affected by the Federal Reserve and its plans for hiking rates aggressively throughout the year. If the Fed follows through on this intent, yields could stand quite a bit higher from recent levels while there is no telling just how high the dollar could reach.

The gold bulls have done a good job in keeping the market steady. The gold market could have drifted lower as yields rose and the dollar strengthened, although it has not thus far. This could point to a degree of underlying strength within the market that is simply waiting for the right time to expose itself. A look at the long-term monthly chart of gold, for example, shows the bulls are still in firm control. Prices have pulled back from the highs made in March, yes, but they have not pulled back too far at this point. The declines from the all-time highs seen in March may be nothing more than a standard pullback of sorts for a market that will eventually head higher again. If that is in fact the case, the market could spend significant time in a sideways pattern for taking off once again.

The bears will attempt to produce a close below the $1800 level to build some momentum in the weeks ahead. The bulls need the market to close above the $1900 level to attract further buying interest. It seems as if the market may have reached the point of whichever side closes first wins-and that price action could continue in that direction for the foreseeable future. The longer the metal moves sideways-or not at all-the greater the potential move may be once it gets going again.