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NEW YORK (TheStreet) -- The gold bullion market has cooled down in the past several days, despite the rising tensions between Russia and U.S and the ongoing fighting between Hamas and Israel. These rising risks didn't seem, for now, to lead to a rise in demand for assets such gold -- usually considered safe haven.

So will gold continue to descend?

This week's recent fall in prices didn't steer investors away from gold investments, though. For one, the SPDR Gold Trust (GLD) - Get SPDR Gold Shares Report, the leading gold ETF worldwide, is seeing growing demand. Its gold hoard passed the 805 tons -- its highest level since April of this year. The ETF's current price inched down by 0.1% to reach $125.62 per share. Other precious metals ETFs such as iShares Gold Trust (IAU) - Get iShares Gold Trust Report also showed a modest gain in its gold hoard as it reached 165.06 tons of gold -- nearly 0.2% higher than at the end of the second quarter. iShares Gold Trust also slipped by 0.15% yesterday and settled at $12.64 per share.

The rising gold hoard in these ETFs serves as a signal about the growing demand for the yellow metal as an investment. But what could determine the future direction of gold? 

One of the driving forces behind the price of gold is the Fed Open Market Committee's monetary policy. Next week the FOMC will convene to decide on any changes to its policy. It is expected to taper its asset purchase program again and end the program altogether by October. The main question remains whether the FOMC will provide some indication as to when it plans to raise its cash rates.

U.S inflation is one of the factors to influence the FOMC members. The core CPI (sans food and energy) inched up by 0.1% in June and reached 1.9% on a yearly scale. The inflation rate is close to the FOMC's target inflation of 2%.

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Another factor is the progress in the labor market. The U.S non-farm payroll grew by over 200,000 jobs in each of the past five months, and the rate of unemployment slid to 6.1% -- well below the FOMC's target.

These factors suggest the FOMC is likely to bring back up the cash rate within the next year. If the cash rate picks up, the fear factor of a potential spike in inflation will subside and precious metals prices are likely to decline.

This brings us back to the tensions in the Middle East or the brewing feud between Russia and the U.S. over Ukraine.

Precious metals also tend to thrive in times of uncertainty and rising geopolitical risk. Unless international tensions intensify, though, gold is likely to keep coming down.

For further reading: 3 Ways to Invest in Silver

At the time of publication, the author held no positions in any of the stocks mentioned, although positions may change at any time.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.