If interest rates increase without being accompanied by a rise in inflation, gold's rally of the past three months may come to an abrupt halt, says Michael Gayed, chief investment strategist at Pension Partners.

Comments by Federal Reserve Chair Janet Yellen last week indicated that the Fed may raise interest rates sooner than many investors expected.

Recent remarks from several Fed officials show they want to curb the central bank's easing, Gayed writes on MarketWatch. "The Fed wants out of the business of stimulus, but at the same time can't risk deflation," he says.

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"Perhaps by threatening higher rates, a sense of urgency will kick in by economic actors and force the velocity of money to rise as people borrow now 'before it's too late.'"

This idea makes sense, but there's no guarantee it will work, Gayed says. "Higher rates and less stimulus without a pickup higher in inflation means higher real rates," he writes.

"That is not a good thing for gold."

Gold has gained 9 percent so far this year. April gold futures traded at $1,315.10 an ounce Tuesday morning, up $3.90 from Monday.

Gold is being buffeted by conflicting forces, with the Ukraine conflict supporting it and fundamentals hurting it, some experts say.

"Traders are torn between the potential support from a rise in geopolitical risks and the negative impact of rising U.S. interest rates as the economy improves," Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen, writes in a report obtained by Bloomberg.

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