Gold at a crossroads

Gold is either in a healthy consolidation after an extended run higher or has topped out.

To me it looks like a healthy consolidate as it chops in the $1275-$1300 range.

Comparing the price action with the fundamentals.

The gains came in an environment of risk aversion but even as that's reversed, gold has held on. That's a positive sign and if/when risk trades turn lower again, it could boost gold.

On the flipside, the US dollar has been weakening since the start of the year (it's the weakest G10 currency this year) and even with the dollar under pressure, gold isn't responding.

Ultimately, the technicals will tell the story. If gold can bust out over $1300 then I think it can continue to run. The lunar new year is February 5 and that should be a tailwind. That said, there are deep concerns about a slowdown there and gift-buying for gold could stumble.