Gold outlook hinges on Fed rate decision

Investors have been bracing for volatility, with Colombo noting that excessive pessimism surrounding recent CPI data caused gold to become overbought before a sharp pullback. The $4,400 per ounce mark remains a critical psychological and technical resistance level. Having served as support throughout much of the year, a decisive daily close above this level—backed by strong volume in futures and ETFs—is necessary to confirm a sustained breakout.

Beyond immediate rate decisions, Colombo points to structural shifts in the economy as long-term drivers. He draws parallels between the current artificial intelligence-fueled data center boom and the housing bubble of two decades ago. While supply-side shocks like energy costs remain difficult for monetary policy to tame, he argues that the current capital expenditure explosion in hardware and electronics is susceptible to Fed intervention. If the central bank opts to hold rates steady this week, Colombo expects a significant momentum shift that could propel the metal toward his $5,000 target in the coming months.