Gold prices are moving sharply higher in thin holiday trade to finish off the week. Stocks are slightly higher this morning while the dollar index is also slightly higher. Crude oil prices are moving up as well.

The gold market has once again bounced from support in the $1173 area. Today’s bounce may likely be attributed to short covering and fresh buying entering the market in addition to thin trading conditions. It would seem that the gold bulls are willing to try to defend this area on the chart, but have thus far not been able to put a large amount of distance in from it either.

Perhaps helping drive gold prices today is the steep drop being seen in the Russian ruble. After a five day rally, the Russian currency is falling about four percent today. The falling ruble and concerns over the Russian economy may lend some support to gold and precious metals. Investors will likely continue to monitor these situations closely going into the new year looking for any signs of stabilization.

Gold is rebounding today but is seeing its second consecutive weekly drop. While the metal had been trending higher in recent weeks, the last two weeks have seen lower highs and a change in trend. That being said, if the lows reached over the last few sessions hold, then gold will have made another higher swing low on the daily chart. While this may be viewed as being constructive for the bulls, the market has a lot of work yet to do to gain better footing on the upside. It is quite likely, however, that the market does not really show its intentions until the new year. With very light and sometimes erratic trading conditions over the holidays, it is difficult to gauge price action and market sentiment.

Gold will continue to face significant headwinds going into 2015. Stocks making new all time highs, a stronger U.S. dollar index, a hawkish Fed and improving economic conditions may all potentially weigh on the yellow metal. On the other hand, one has to wonder just how much the stock market may still have left in the tank and if the dollar can continue its ascent. With regards to the Fed, although the central bank will be raising rates this may end up being bullish for gold. While that sounds counter-intuitive, the gold market may become more concerned with the slope or timing of additional rate hikes rather than the beginning of the tightening process itself.

It is likely to be an interesting year for gold one way or the other, and the first few weeks of the new year may prove to be very interesting as investors look to either reallocate assets or stay the course.