Last week’s larger market sell-off, which was triggered by hawkish comments from U.S. Federal Reserve officials that dampened expectations for a December interest rate cut, caused gold prices to drop 2.5% and silver prices to drop 5.5%. In the meantime, the Federal Reserve is citing the shutdown blackout as justification for maintaining unchanged interest rates in December. Naturally, this is in line with the proverb, “Do nothing when you do not know what to do.”

Since the beginning of last week, the US dollar’s weakness and rumours that the Fed would resume asset purchases have served as catalysts for gold’s rise, but Thursday and Friday made it abundantly evident that this is no longer the case. Additionally, gold and silver faced pressure from position closing to meet margin calls brought on by declines in equity markets, which fell on Friday after the global selloff sparked by hawkish Fed signals. Market expectations for a 25 basis-point rate cut next month dropped to 42% from 64% earlier this week, down from more than 95% a month ago, according to CME Group’s FedWatch tool.

The longest U.S. government shutdown ended Thursday, creating a major data gap that left the Fed and traders flying blind ahead of next month’s policy meeting. The U.S. government shutdown lasted 43 days, the longest in history, but the effects will likely be felt for the next few weeks. Some economic data, such as October’s CPI numbers, will be lost forever because that information is collected manually. For economists, this could be a significant issue because economic modelling depends on reliable, consistent data.

In the end, inflation is not high enough to stop the Fed — especially as it continues to face pressure from President Donald Trump — from cutting interest rates, and even if the central bank skips the December meeting, rates will be lower in 2026. While there are clear signs that the U.S. labour market is losing significant momentum, even without October’s economic data, inflation is also not accelerating. One Federal Reserve meeting will not affect gold’s long-term fundamental support.