Gold Comex futures were virtually flat Tuesday afternoon, trading at $1160.20 an ounce. That figure is well off the highs in early November of $1340, when uncertainty in the immediate aftermath of Donald Trump's election to the presidency briefly sent investors scurrying to the "safe haven."
With political crisis out of the picture for the immediate future and a general sense of optimism around Trump prevailing in U.S. markets, the long-term outlook for gold may be a bit cloudier.
"There tends to be an inverse correlation between the dollar and commodity prices," Oppenheimer head of technical analysis Ari Wald said in a phone interview. "While we see this strength in the dollar, we think it could bring some headwinds [for gold]."
In a Monday research note, Wald said he expected gold to trade in a range between $1045 an ounce - its 2015 low - and $1250. His rationale for the relatively narrow trading band stems from the metal's behavior in the early 2000s, when it traded sideways for a solid year after snapping a multiyear slump.
"What we saw then was gold requiring more time," Wald said. "It was more or less dead money for the next year or two [in 2000]."
The flat outlook for gold jibes well with the broader theme in Wald's note: that risk is making a comeback.
To that point, Wald cites the recent oil rally which spanned 2016 - albeit in fits and starts.
"Our take on the trend of [WTI Crude] is that it's in the process of basing and reversing higher," he said. WTI Crude was trading at $52.38 a barrel Tuesday, down 2.49% but well above its $44.50 price tag at the same point last year.
Wald has a $62 price target on WTI crude for 2017, a figure that many would have thought to be unthinkable in early 2016 given oversupply concerns and infighting among OPEC countries.
Though oil may be starting 2017 off slightly down, WTI's breakout over $51 may be a turning point, Wald said.
"I think it's signaling new demand for the black gold at a level where sellers had previously come in," he added.