Precious Metals Enter Pivotal Week As Traders Await Fed’s Final 2025 Rate Decision

On December 9, 2025, FX Empire reported that precious metals were entering a pivotal week as traders prepared for the Federal Reserve’s final 2025 rate decision [1]. Scheduled to conclude on December 10, the FOMC meeting was widely anticipated to deliver a third consecutive 25-basis-point rate cut, with market expectations pegged at 90% [2]. Lower interest rates typically support non-yielding assets like gold and silver by reducing the opportunity cost of holding them. However, gold (GLD) declined 1.11% from its December 1 close of $389.75 to $385.42 on December 8 [0], likely due to profit-taking and cautious trading as investors priced in the expected rate cut. Silver (SLV) experienced greater volatility but ended the period with a 0.36% gain, rising from $52.52 to $52.71, after earlier hitting a record high [3]. Market sentiment balanced rate cut optimism with concerns over potential dissents (up to four officials expected to object) and uncertainty regarding the Fed’s forward guidance on 2026 rate cuts [2].

1. Price Movement Dynamics
   : The contrasting trends between gold and silver highlight differing demand drivers; silver’s industrial usage may have contributed to its resilience amid volatility, while gold’s decline suggests profit-taking after prior gains [3].
2. Market Pricing of Rate Cuts
   : The pre-meeting decline in gold prices indicates that much of the expected rate cut was already factored into valuations, reducing the potential for further immediate gains if the decision aligns with expectations [0].
3. Importance of Forward Guidance
   : While the rate cut itself is widely expected, the Fed’s Summary of Economic Projections (SEP) and Chair Powell’s press conference comments on 2026 rate cuts will be the primary drivers of medium-term precious metals trends [2].

• Overpricing Risk
  : If the 25-basis-point rate cut is fully priced into precious metals, any deviation (e.g., smaller cut, no cut, or hawkish guidance) could lead to sharp price corrections [3].
• Dissent Impact
  : A higher-than-expected number of dissents from the rate cut could signal divided Fed sentiment, dampening market optimism for future cuts [2].
• 2026 Rate Outlook
  : Fewer rate cuts than projected in the Fed’s SEP could pressure precious metals prices in the medium term [4].

• Dovish Guidance
  : If the Fed provides clear signals of additional 2026 rate cuts, precious metals may experience sustained gains as investors adjust to lower long-term interest rates [2].
• Inflation Concerns
  : The Fed’s SEP will address inflation and growth data; if inflation remains a concern, precious metals could benefit as a traditional hedge [2].

As of December 8, 2025, market expectations for a 25-basis-point Fed rate cut stood at 90% [2]. Gold (GLD) declined 1.11% to $385.42, while silver (SLV) gained 0.36% to $52.71 [0]. The Fed’s forward guidance on 2026 rate cuts and potential dissents remain critical uncertainties. Investors should monitor the SEP and Chair Powell’s press conference for insights into future monetary policy trends. No investment recommendations are provided; this summary is for informational purposes only.