The gold price has staged a substantial rally since last week after the US Federal Reserve latest board meeting where they stated that any move in US interest rates would be data dependent and they were in no hurry to push rates higher.

This left many in the market believing that the Fed may be done with their latest rate hiking cycle which was the main catalyst for gold’s rally as the US dollar loses some of its `yield appeal when rates are kept the same and as a result benefits gold.

Since the latest interest rate decision from the Fed, the market has seen a wave of solid economic data from the US which included another strong US jobs report which has now thrown doubt into the theory that rates will remain on hold and that the Fed may have to keep raising them.

This has been reflected over the last few days with the US dollar rebounding against the major currencies as well as gold which is reflected on a technical level with the higher highs and lower lows.

Residual strength in the dollar gives off the impression of a near term dollar uptrend and that could keep the bias in both gold and silver pointing downward,” noted analysts at Zaner Precious Metals.

“Clearly, the gold and silver markets damaged their charts Monday by extending a recent pattern of lower lows and lower highs.” They added.

For now gold remains comfortably above the $1300 mark which seems to be its new support base and the next few days will be critical in seeing whether this level will hold.

This will come down to any further strength in the US dollar and if the Market really believes the Fed is done with their rate hiking cycle or this is just a temporary pause and more hikes are on the way.