Next week is the Fed's decision—will gold break out?

Right now, gold is stuck in a high-level sideways range, and this stalemate is very likely to be broken by next week's Fed rate decision. The market has already fully priced in the expectation of a 25 basis point rate cut; the real uncertainty lies in how the post-meeting statement is worded and what Powell says at the press conference.

If a more dovish signal is released—for example, hinting at further rate cuts in the future—gold will most likely shoot straight toward the 4264 resistance level, and could even break out to a new high. After all, once risk-off sentiment is triggered, capital flows can be very rapid.

But if the Fed's tone is more hawkish and they indicate a pause to "wait and see" on the data, then gold will need to beware of a "sell the news" scenario after the bullish expectations are fulfilled. After such a long period of sideways movement, once the direction is clear, volatility will not be small.

In short, once next week's monetary policy stance is set, the short-term trend for gold will also become clear.