Gold may be poised to rally as speculation mounts that the Federal Reserve will hit the pause button on interest rate hikes in 2019. After lift-off in late 2015 followed by a rise a year later, the central bank has since steadily raised benchmark rates and is widely expected to do so again this month. But the path after that is clouded after Chairman Jerome Powell said Wednesday rates are \u201cjust below\u201d estimates of the so-called neutral level, which markets took to mean a softer stance than previous comments. It was \u201cgetting pretty obvious that at some point Powell would have to flinch,\u201d said Trey Reik, senior money manager at the U.S. unit of Sprott Inc., which oversees $7.6 billion. \u201cOnce you get to the consensus view that the Fed may be done, the dollar may come under severe pressure. Gold will erupt.\u201d While bullion was weighed down in the second and third quarters by a stronger dollar and rising borrowing costs, the dynamic may now be shifting as doubts build over the Fed\u2019s tightening path in 2019. Drivers that favor further gains in bullion include a steady build-up in exchange-traded fund holdings as well as votes of confidence from top banks. Goldman\u2019s View Goldman Sachs Group Inc. recommends an outright long gold position into next year. \u201cIf U.S. growth slows down next year, as expected, gold would benefit from higher demand,\u201d analysts including Jeffrey Currie said in a Nov. 26 note that endorsed bullion as one of its top-10 trade ideas for commodities. \u201cThe market has already priced in 10 out of the 12 rate hikes that we expect.\u201d Last week, futures capped the first back-to-back monthly gain since January, and on Monday they traded at $1,228 an ounce. That uptick followed two quarters of declines through to September, with prices hitting a 19-month low in August. So far this year, bullion\u2019s still down more than 6 percent. On Wednesday, Powell offered few explicit clues on how many hikes will be necessary in 2019, but repeated his view that the Fed will have to be especially responsive to the data. Minutes the next day, which covered the Fed\u2019s last meeting, signaled policy makers will adopt a more flexible approach in 2019. Powell had earlier stirred a debate over tightening when he flagged potential headwinds to the economy amid a sell-off in equities and concerns over slowing global growth. On Wednesday, he remained upbeat, forecasting continued solid growth, inflation near the 2 percent target and low unemployment. \u2018Cue to Buy\u2019 Joblessness stood at 3.7 percent in October, well below the rate the Fed sees as sustainable in the longer run. Any tick up in unemployment next year could see a pricing out of hike expectations, according to Chris Weston, head of research at Pepperstone Group Ltd. in Melbourne. \u201cIf people get a sense that unemployment\u2019s going up, heaven forbid, we\u2019re going to see great volatility in 2019,\u201d Weston said by phone on Nov. 29. \u201cThat\u2019s going to be a cue to sell the dollar, and that\u2019s going to be a cue to buy gold in much bigger size.\u201d Higher rates are seen to weigh on bullion, which doesn\u2019t bear interest. Yet in the two most recent U.S. hiking cycles, gold has risen even as equities climbed because the Fed lagged inflation, which meant that cash in the bank lost purchasing power, making gold a more appealing store of value, said Adrian Ash, research director at London-based BullionVault Ltd. \u201cBy themselves, Fed rate hikes aren\u2019t always bad for gold and cuts aren\u2019t always good,\u201d said Ash. \u201cAcross longer periods, what the Fed does matters less to gold than why it changes policy and how the stock market reacts.\u201d During the previous tightening cycle from mid-2004 to 2006, when borrowing costs rose to 5.25 percent, gold surged more than 50 percent. Since December 2015, bullion\u2019s up about 15 percent, although it\u2019s lost ground this year. Still, some say the Fed will continue hiking. Powell\u2019s speech essentially said the economy is doing well, and asset prices are not in a bubble, but that rates are close to \u2018neutral\u2019 although people dispute what that is, according to Nicholas Frappell, global general manager at Sydney-based ABC Bullion. \u201cGold may struggle to rally,\u201d Frappell said. \u201cGold will face a longer period of Fed tightening before the interest-rate cycle turns in 2019.\u201d U.S.-China trade issues could also dominate the Fed\u2019s narrative, he added. All eyes will now be on the Federal Open Market Committee\u2019s final gathering of this year on Dec. 18-19 to glean further clues on what may happen. In language following that policy meeting, officials may convey \u201csufficient softening of future expectations,\u201d said Sprott\u2019s Reik, who\u2019s expecting the central bank to halt rate hikes next year. He sees gold prices climbing to $1,360 in the first half and potentially hitting $1,525 in 2019, a level last seen in 2013.