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The gold market is just slightly higher in early action Thursday as the metal sees a corrective rebound and some short covering. The yellow metal is largely ignoring some stronger-than-expected economic data today and seems to have fully digested the release of the latest Fed meeting minutes yesterday afternoon.

The Fed minutes can be a major economic data piece and have the ability to move markets. Such was not the case yesterday, however, as the minutes did not seem to provide anything new. Deemed to be slightly dovish, the minutes did not seem to provide investors with anything new of substance and were therefore a non-event. More clues about the Fed and its intentions will likely not come now until the next FOMC meeting next month.

Markets will have to monitor the data stream closely and will closely scrutinize any key pieces of economic data. The big question for investors is whether the Fed will elect to remain aggressive and hike rates accordingly. Fed Chairman Jerome Powell seemingly started to pivot away from further rate hikes in his latest commentary. He could be laying the groundwork for the Fed to abandon its inflation fight, knowing that the central bank perhaps does not have the ammunition necessary to put a halt to price pressures.

The notion of higher interest rates had caused stocks to sell off and volatility to rise substantially. The markets have since calmed in recent weeks, however, and stocks may be looking to begin a new bull market after their significant decline in recent months. Recent equity market strength may be weighing on gold, in fact, and could keep investors away from the yellow metal.

Despite stocks’ recent rise, the market does remain vulnerable to another reversal lower. The rally seen in equities is not unusual at all for a bear market. Lower stock markets often see significant rallies before rolling back over again, and the recent equity upside may simply be the latest pop in a market that could be making new lows in the weeks ahead. Should stocks roll over and head lower again, much of that capital could start to find its way into the gold market.

As the summer doldrums wind down over the weeks ahead, the gold market could remain primarily sideways in the absence of further inputs. The key technical levels remain unchanged at $1700 and $1800. Given recent upside momentum, however, a close above the $1800 level could set the stage for a further probe higher. The upside momentum, combined with some solid short covering, could take prices all the way towards the $1900 level in a short period of time. If and when that test takes place, a breakout above $1900 could pave the way for the market to return to previous all-time highs or even well beyond. The market may lack any sustainable moves up or down over the next month or so as the Fed is awaited, however.