Gold Prices Could Soar if Fed Holds Rates Steady: Analyst

Gold prices could see a relief rally if the Federal Reserve hikes interest rates by 25 basis points, according to Jesse Colombo, an independent precious metals analyst. However, a hold on rates could lead to a surge in gold prices as it begins its march back to $5,000 per ounce.

In an interview with Kitco News, Colombo said that investors were overly bearish ahead of the August CPI release and sold off gold excessively. He believes that this overbought condition led to a brief respite for gold after the numbers came in slightly hotter than expected.

Colombo noted that spot gold bumped up against the $4,400 per ounce resistance level following the CPI release, which he considers an important support and resistance level.

If the Fed holds rates steady, Colombo expects a significant rally in gold prices, potentially reaching $5,000 in the next few months. He would like to see a daily close above $4,400 with strong volume on futures, ETFs, and mining stocks as confirmation of this move.