According to the CME FedWatch Tool, the probability of a December rate cut has fallen to roughly 35%, down sharply from earlier in the month. That shift helped lift the dollar to its strongest level since May, creating a challenging backdrop for non-yielding assets such as gold and silver.
The dollar’s advance was also supported by concerns surrounding the prolonged U.S. government shutdown, which analysts warn may disrupt near-term economic momentum. Even so, global equity weakness bolstered demand for the greenback as investors sought liquidity and short-term safety.
Minutes from the latest Federal Open Market Committee meeting underscored policymakers’ divided views on the appropriate path forward. The lack of consensus weakened the case for a swift pivot toward easing, further discouraging bullish positioning in precious metals.
Key U.S. Data in Focus
Traders now await a set of high-impact releases: U.S. flash PMI readings, revised University of Michigan sentiment data, and speeches from multiple FOMC officials.
Any indication that economic activity is cooling more quickly than expected could revive expectations of earlier policy adjustment, providing near-term support for gold and silver.
Geopolitical Risks Offer a Partial Floor
Broader geopolitical tensions continue to add a mild cushion beneath the metals market. Although diplomatic discussions have intensified in recent days, uncertainty remains elevated enough to maintain a modest risk premium in traditional safe-haven assets.