Not that gold prices and silver prices haven’t bounced back from worse, but the third quarter of 2014 most definitely confirmed the world’s most popular precious metals are no longer the easy, slam-dunk winners they once were.

Barring an enormous swing in gold’s direction, the commodity is apt to log a loss of roughly 8% for Q3. Silver prices fell nearly 16% for the three-month span.

Of course, the past is the past. The big question the gold investing crowd is asking now: What’s next for gold prices?

A look at all the clues — short term as well as long term — will provide a plausible answer.

Short-Term Outlook for Gold Prices

It’s not difficult to find an explanation for the dramatic dip in gold prices. The value of the U.S. dollar soared during that time, and because gold is priced in U.S. dollars (even for foreign buyers), the more valuable dollar translated led to less valuable gold.

The chart below illustrates the inverse relationship:

When the U.S. Dollar Index rallied from 80 in early July to a peak of 84.86 this week (an enormous move by currency standards), gold prices tumbled from a value of $1,349 per ounce to $1,222.

As for the future: The moves from the greenback and gold weren’t just sharp; they were sharp to the point of being unsustainable. In fact, it appears both efforts are on the verge of reversing direction.

It’s not a coincidence the reversals materialized where they did, either. A floor around $1,190 has been holding gold prices up since mid-2013, and the U.S. Dollar Index has been capped around 84.5 for a couple of years now. While gold didn’t precisely test its floor this time around, and while the U.S. dollar traveled slightly beyond its known resistance, both effectively halted at major lines in the sand.

Silver prices didn’t hold up quite as well, breaking under a key support level at $18.75 per ounce. Although the underlying reason for weak silver prices was the same as the reason for the plunge in gold prices (a soaring sawbuck), there’s clearly less resiliency from silver. The break under a major support line won’t be easy to shrug off … if it can shrug it off anytime soon.

Long-Term Outlook for Gold Prices

Although the near term looks relatively promising for gold prices and less-than-worrisome for silver prices, there’s no particular guarantee that the long-term undertow points in the same direction as the near-term trend does.

And, as it just so happens right now, the trends aren’t aligned.

The primary long-term drivers of gold prices are inflation and demand (as in actual buying of the commodity). Since gold is regarded as the ideal hedge against inflation, periods of high inflation are bullish for gold prices, and vice versa.

Problem: Not only is inflation not roaring out of control, it’s actually quite tame, and even in a downtrend. As of last month, the annualized consumer inflation rate is a tepid 1.7%. It’s not even close to being the kind of situation that prompts an insatiable wave of gold investing.

As for gold demand, although the World Gold Council’s official Q3 supply/demand net-consumption report has yet to be posted, the council’s data indicates waning demand.

In the meantime, BullionVault’s Gold Investor Index remains in a long-term downtrend and is close to moving under a score of 50, which would indicate a net-bearish market for gold.

Bottom Line

While gold prices and silver prices might be poised to bounce out of the short-term funk as we head out of the third quarter and into the fourth, the bigger picture backdrop isn’t an especially encouraging one for precious metals.

Realistically, any rebound for gold prices is going to hit a headwind around $1,325 per ounce; that’s where an intermediate-term resistance line currently lies.

Even a move beyond the $1,325 mark, however, is likely to meet another ceiling near $1,370.

A move past the $1,325 ceiling would constitute a trade-worthy breakout, but that’s a (very) long shot given the longer-term factors in play. The good news is, as weak as inflation and demand are at this point, it’s unlikely the situation could get much worse for gold prices either. In the unlikely event the floor at $1,190 fails, odds are good that a bottom would be found fairly quickly. The same goes for silver prices.

In short, gold and silver look like they’re going to be range-bound at least through the fourth quarter as the inflation, dollar and consumption kinks continue to be straightened out.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.