Throughout the first quarter of 2015, equity benchmarks were relatively skittish, with investors lacking confidence. And while gold had its ups and downs, it still managed to (barely) outperform the market as shown in the following chart (as represented by SPY and GLD):

Though it just managed to outdo markets in the dying days of the quarter, gold’s rise when markets struggled early in the year was a positive sign as far as investors were concerned. Right now there are two big factors that could play into gold’s favor.

The first is the strong U.S. dollar. For the past year the greenback has been surging, and many feel that its rally is overextended. The rising dollar has kept gold prices at bay, but if it begins to recede, gold will have some room to run higher. Of course, if the dollar continues to soar, it will create more headwinds for the precious metal.

The second, and more significant, factor playing into gold’s price this year is the Fed’s interest rate decision. It is generally accepted that the market does not want the Fed to raise rates, but it is an inevitability that stocks will eventually have to face. For the time being, many believe that raise will happen later this year at which point some expect markets to correct. A market correction favors gold as investors scurry to the safe haven commodity. And that trend has already shown some signs of life in 2015 [see also 50 Ways To Invest In Gold].

For the first quarter, SPY saw nearly $30 billion in net asset outflows while GLD picked up just over $1 billion in assets; this comes after two consecutive years of net asset outflows for the gold fund.

Gold has arguably endured the most pressure of any commodity over the last few years. After being the darling of the hard asset world, the yellow metal’s decline in the last few years disappointed many. Investors have been betting that gold will have to rise given the copious QE and Fed intervention over the last few years, but that has failed to establish a long term trend.

The precious metal will undoubtedly be under the microscope for 2015, especially if the Fed makes a move regarding interest rates before the year is done. Gold investors or those looking to establish a position should keep a close eye on the Fed as well as the movements of the U.S. dollar in the coming months.

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Disclosure: No positions at time of writing.