“If the Fed does in fact turn neutral to dovish, the rally in gold will be in contained because equities will also turn higher,” Haberkorn added.

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Hedge funds and other speculative traders remain wary of the gold play. Bullish bets on prices have barely exceeded bearish wagers for the week ended December 18, according to the latest data from the Commodity Futures Trading Commission. In contrast, during the second half of last year, bearish bets topped bullish plays.

The current sentiment on a potential resolution to the U.S.-China trade fight has also weighed on the gold outlook since an end to the trade war would improve the global growth outlook and risk-on play.

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