For much of October, futures markets had treated a December cut as almost a done deal, with implied probabilities near 90 percent at one point. As the shutdown dragged on and the data flow from agencies such as the Bureau of Labor Statistics dried up, that confidence evaporated. CME’s FedWatch tool now shows pricing that oscillates around coin-toss territory for a 25-basis-point move, roughly 50–65 percent depending on the day and contract. 

Fed chair Jerome Powell has helped reinforce that re-pricing. At the end of October, the central bank delivered a quarter-point cut but Powell signalled it could be the final one of 2025, noting “strongly differing views” inside the committee about whether further easing is appropriate. Since then, officials have repeatedly highlighted the lack of reliable inflation and labour-market data due to the shutdown, making it harder to justify another move in December purely on the basis of the Fed’s usual “data-dependent” framework. 

The result is an unusual tension. On one side stand those arguing that a softening jobs market and political pressure after a bruising shutdown favour more support. On the other side are policymakers warning that inflation remains above target and that easing again without a clear statistical picture risks over-stimulating the economy. With the statistical agencies racing to catch up, much of the information arriving before the December meeting will be backward-looking and noisy, rather than a clean snapshot of post-shutdown conditions. 

Gold Prices Rebounded After Retreating Below $4,000

As the shutdown lengthened and investors bet that the Fed would eventually be pushed toward a more dovish stance, bullion prices climbed. In mid-November, spot gold touched a near three-week high above 4,120 dollars an ounce, helped by expectations that an end to the shutdown and the release of delayed data could give the Fed cover to trim rates. On 12 November, with optimism growing that a funding deal was imminent, gold gained around 2 % as the dollar eased and rate-cut hopes stayed alive.*

However, gold’s path has not been one-way. As markets reassessed the likelihood of a December move and FedWatch probabilities dropped sharply from mid-October peaks, futures on U.S. equity indices, gold and silver all came under pressure. One CME recap noted that metals sold off as the implied chance of a December cut fell from about 95 % to “just over 50 %,” while Treasury yields moved higher. In other words, gold has been caught between two forces: support from lingering uncertainty around growth and fiscal politics, and periodic setbacks whenever markets decide that immediate easing is less probable than previously thought.

Gold spot performance against the USD over the past 5 years. (Source: tradingview.com)

Conclusion

What emerges from this episode is a picture of a Fed that is more constrained and a gold market that has become an instant read-out on shifting policy odds. The shutdown may be over, but as long as the data calendar remains distorted and the December decision finely balanced, the debate about whether 2025 will bring another cut is likely to play out first in expectations and in the gold price rather than in official rate moves. 

* Past performance is no guarantee of future results.