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The gold market could potentially see some additional selling this week as higher stocks and rising rates point to an improvement in overall risk appetite. Some profit taking and back and fill trade is to be expected in gold at this point following recent upside, and may simply prove to be a short-term detour before another leg higher.

Although the June 23^rd Brexit referendum has been the focal point of markets for several weeks, that historic vote has begun to take a back seat to other issues. On Friday, the nation of Turkey experienced an attempted coup that dominated news headlines over the weekend.

The coup was a failure, and President Recep Tayyip Erdogan appears to be in full control of the country. Unfortunately, this type of uprising often does not work out well, and it will be some time before the nation feels secure again. In the meantime, there have been talks of bringing the death penalty back and thousands have been arrested.

While the issues seen in Turkey over the last couple days have not had a major impact on global markets, it does go to show just how fragile peace and geopolitics can be.

In other news, the world is still reeling from last week’s terrorist attack in Nice, France in which 84 people lost their lives and hundreds were injured. This terrorist attack did not have a large impact on global markets, and unfortunately, it seems that the world has grown accustomed to such attacks. The threat of terrorism is something that may have to be dealt with for a long time, and the possibility of increasing risk aversion in global markets always exists.

Markets will likely turn their attention this week to the Republican National Convention being held in Ohio this week. With the top candidates having major differences on so many key issues, investors will likely pay more attention to the Presidential race as it approaches the finish line. A close race has the potential to impact markets and drive risk aversion as the uncertainty over the direction of the country going forward could compel investors to dump risk assets in favor of perceived safe havens.

This week will be on the lighter side from a data perspective, and trading volumes could begin to dry up as investors take vacations and get away from markets for a bit. That being said, investors will get the latest readings on some key pieces of housing data, as well as Weekly Jobless Claims, PMI Manufacturing data and Leading Indicators.

The ongoing debate over the pace and timing of any further rate hikes by the Fed will likely continue, but for now it appears that the dovish camp may have the edge. The reality is that even with another hike, or even two or three, interest rates will likely remain low for some time to come as ongoing concerns over China, Brexit and other issues keep the Fed from being too aggressive.

While the notion of lower rates for longer is bullish for stocks, it is also bullish for gold and precious metals. Thus far, gold has held up well in spite of stronger equities in what could be a sign of underlying strength. By the same token, one has to wonder just how much stocks may have left in the tank.

Any signs of weakness in equities could potentially send more investors running for gold and other perceived safe havens, and gold may simply be biding its time before another major push higher. The current dip in gold may prove to be nothing more than another great buying opportunity.