Recently, the gold market has often moved in the opposite direction as the stock market, with the Dow Jones Industrials (^DJI -0.06%) setting more than four dozen highs in 2013 even as the yellow metal plunged to its lowest levels in years. The Dow was down 55 points as of 1:30 p.m. EDT, but that pullback from Thursday's pre-holiday record wasn't enough to get gold investors excited: The SPDR Gold Trust (GLD 0.18%) fell nearly half a percent and the iShares Silver Trust (SLV -0.10%) declined almost 1%. Even if you don't pay much attention to gold prices, following the gold market can offer useful insight into what's happening with the Dow Jones Industrials and the remainder of the stock market.

Are the stars aligning for gold?
The fallout in the gold market over the past couple years has been tough for long-term gold investors to take. After more than a decade of consecutive annual increases in the price of the yellow metal, gold prices plunged in 2013. While the SPDR Gold Trust and iShares Silver Trust have regained some ground so far in 2014, they still languish far behind the Dow Jones Industrials over the past two years.

GLD Chart

Dow and metals data by YCharts.

Historically, the relationship between gold and the stock market has gone through different phases. Sometimes the two move in opposite directions, as gold's role as a safe-haven investment and as a fighter against inflation tends to gain in prominence when the Dow Jones Industrials and other stocks are suffering from unstable market environments and rising costs. At other times the two move more in lockstep, as favorable economic conditions like an accommodative monetary policy supports both markets.

Image sources: Wikimedia Commons; Creative Commons/Armin Kubelbeck.

In 2014, we've seen both of these sets of factors at work supporting the gold market. Signs of inflationary pressure have popped up at the wholesale and consumer levels. Geopolitical risk has been on the upswing, with major confrontations in Ukraine and Iraq reaffirming the tenuous relationships among the most important nations in the world. Yet the Federal Reserve has seemed slow to remove its favorable monetary policy, and so gold investors have been able to sustain their positions without paying more in futures-related and spot-related borrowing costs.

What's ahead
Today's declines in gold and silver are insignificant from a long-term perspective, but they also indicate investors' anticipation of changing conditions. The Fed this week will release the latest minutes from its monetary policy-setting committee; investors will look for signs that the central bank will raise rates faster than expected. A rise in short-term rates will boost gold traders' costs to finance their positions, and that often leads to a sell-off in the gold market. The Dow could also stumble if this rate spike happens much sooner than current projections.

In the long run, though, the Dow and precious metals likely have different roads to follow. While the Dow is hanging on to a long bull market, gold and silver investors have something to prove -- and that could make the precious metals markets a lot more interesting for the rest of 2014.