Gold fell ahead of first-quarter earnings season as the dollar gained while the precious metal slumped to its lowest level of the month on Thursday.

Gold fell 1.23 percent at the close of Thursday’s trading session to settle at a price of $1.295.15. Nonetheless, analysts maintain that this is only a temporary setback.

“This drop is the largest since the first half of 2016, which proved a strong catalyst for gold prices,” said Maxwell Gold, director of investment strategy at Aberdeen Standard Investments.

The SPDR Gold Shares (NYSEArca: GLD) and SPDR Gold MiniShares (NYSEArca: GLDM) both declined off gold’s weakness–GLD fell 1.27 percent at the end of the trading session and GLDM lost 1.23 percent.

The drop in the precious metal comes even as headwinds facing the dollar loom. Last month, the Fed elected to keep rates unchanged last month, holding its policy rate in a range between 2.25 percent and 2.5 percent.

In addition, the central bank alluded to no more rate hikes for the rest of 2019 after initially forecasting two. The capital markets initially expected rates to remain steady after the central bank spoke in more dovish tones following the fourth and final rate hike for 2018 last December.

Of course, less hikes and a rate cut would translate to dollar weakness–an open path for strength in gold. Other headwinds include increasing concerns of slowing global economic growth, which could spur a move to safe havens like gold.

However, according to the minutes published at its last Federal Open Market Committee meeting, the Federal Reserve did leave open the possibility of possible rate hikes this year if the economic data suggests warranting such a move. This, of course, wouldn’t bode well for gold.

“The minutes confirmed that if the economic data continue to support the economy, a rate hike could be on the table at the back end of this year. Luckily for the dollar bears, this wasn’t the majority view, at least, not for the time being,” said Naeem Aslam, analyst at ThinkMarkets.

“I do believe that for the time being the Fed is going to continue to sit on its hands and just monitor the situation carefully. The evidence of this comes from the fact that the gold price is still trading above the $1,300 mark. For bulls, this is a critical level, it sends a strong signal of recovery and hope. As long as the price stays above this critical mark, we have hope that the price may cross the $1,350 level,” Aslam said.

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Despite signs of a global economic slowdown, however, figureheads like Federal Reserve Vice Chairman Richard Clarida are throwing their support behind the U.S. economy, saying it has room to grow. A decade following a punishing financial crisis, Clarida said “the current economic expansion almost certainly will become the longest on record.”

The Fed vice chair’s comments come amid the IMF cutting its global growth forecast to the lowest level since the financial crisis, citing the impact of tariffs and a weak outlook for most developed markets. According to the IMF, the world economy will grow at a 3.3 percent pace, which is 0.2 percent lower versus the initial forecast in January.

Wall Street analysts are expecting a less-than-stellar earnings season for the first quarter as big banks like J.P. Morgan and Bank of America are scheduled to kick off reporting on Friday. Investors are looking at a 4.3 percent year-over-year reduction in earnings growth, according to FactSet estimates.

Should those estimates hold up, it would represent the first profit reduction for the S&P 500 since the second quarter of 2016. With analysts expecting a decline in earnings, the focus falls on corporate guidance for the rest of the year, which could help temper any investor fears.

“It may only be a matter of time as concerns about rising levels of negative-yielding debt, an inverted yield curve, and the risk of a recession grow,” said Gold. “Gold’s role as a potential risk hedge could grow if the market experiences a bout of volatility in response to these concerns.”

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