The gold market tonight focuses on the Federal Reserve's decision: The key to the future direction is not whether to cut interest rates, but how the future interest rate cuts will unfold.
If Powell sends a dovish signal—cutting interest rates by 25 basis points and indicating that further policy easing will continue—then the dollar may weaken. As yields on deposits, bonds, and other assets decline, the opportunity cost of holding gold significantly decreases, and capital is expected to flow into the gold market, pushing gold prices to challenge new highs of $4250.
On the contrary, if a "hawkish rate cut" occurs—cutting rates while emphasizing that inflation risks remain and that future rate cuts may pause—then the market may see a "buy the expectation, sell the fact" scenario. The previously priced-in positive news may reverse into selling pressure, and profit-taking by bulls could lead to a pullback in gold prices, with the $4100 level potentially facing a test.
The core issue is whether the "rate cut roadmap" outlined by the Federal Reserve is sufficiently accommodative. Even if it meets market expectations but lacks additional surprises, one must be wary of adjustment risks brought about by profit-taking.