Precious Metals Enter Pivotal Week as Traders Brace for Fed’s Final 2025 Rate Decision

As traders await the year’s final interest rate decision, the debate gripping Wall Street is no longer about whether the Fed will cut, but what this cut signals for the trajectory of the U.S economy in 2026 and beyond.

Expectations of a quarter-point reduction are now fully priced, with traders assigning a near 90% probability of a third consecutive cut. Evidence of a cooling labour market and a chorus of dovish messaging from senior policymakers – most notably New York Fed president John Williams, who recently said borrowing costs could fall “in the near term” – has cemented market conviction.

Private-sector payrolls have already contracted sharply, with ADP data showing a 32,000 drop in November, the largest since 2023. Meanwhile, the Fed’s own communications have emphasised rising downside risks to employment, even as inflation remains uncomfortably above the Fed’s 2% target.

Yet this week’s decision is about far more than a routine adjustment to interest rates. It marks the climax of an increasingly fraught ideological clash inside the central bank – a divide sharpened by incomplete economic data following a prolonged government shutdown, persistent concerns over tariff-driven price increases and the looming shadow of political pressure from President Donald Trump.

A Deepening Split Inside the Fed

Federal Reserve Chair Jerome Powell is widely expected to push through another quarter-point cut despite the most visible internal dissent since 2019. Several regional bank presidents have warned that inflation, especially in services, remains too high to justify renewed easing. Others argue that delaying action risks exacerbating labour-market deterioration at a moment when major employers including Amazon and Verizon have already announced significant layoffs.

Powell’s challenge is further complicated by the approach of his own term’s expiry in May 2026.

Trump’s expected nominee – Kevin Hassett, a fierce supporter of aggressive rate cuts – is already prompting alarms among traders who fear political intervention could shape monetary policy in the year ahead.

The Fed’s balance-sheet trajectory also hangs in the balance. After ending its two-year quantitative tightening programme, policymakers must now decide whether renewed liquidity is needed to stabilise markets into 2026.

Markets Prepare for a Historic Pivot

The release of the Fed’s updated projections for growth, inflation and interest rates will offer the clearest roadmap yet for the next phase of policy. Lars Hansen, Head of Research at The Gold & Silver Club expects two further reductions in 2026, though only if inflation shows sustained improvement – a condition complicated by the late publication of official CPI figures.

“The Fed is approaching a once-in-a-generation pivot,” says Hansen. “Every major Commodities Supercycle in the last 50 years has begun at moments of Fed hesitation. If policymakers cut again this week, it could set the stage for explosive upside across Precious Metals”.

The implications extend far beyond. Over the past century, periods of Federal Reserve policy easing have consistently triggered powerful rallies in Gold, Silver and broader Commodities markets. With political pressure intensifying and economic data deteriorating, traders increasingly view this week’s decision as the spark that could ignite the next major Commodities boom heading into 2026.

The Moment Traders Cannot Afford to Miss

Powell’s predicament is clear: move too slowly and the labour market could unwind; move too aggressively and inflationary pressures may resurge. Yet history is unmistakable – whenever the Fed blinks, Commodities surge.

Analysts at The Gold & Silver Club now project that aggressive rate-cut momentum combined with Trump-era tariff distortions could propel Gold towards $5,000 and Silver as high as $75 an ounce.

For traders, this is the kind of moment fortunes are built on. This is not simply another routine FOMC policy meeting – it is a rare monetary inflection point. One bold decision on December 10 could reshape global financial markets for the next decade.

Wall Street consensus is converging around the view that a once-in-a-decade opportunity is unfolding. Savvy traders positioned ahead of this decision stand to capitalize on life-changing gains. The only question is – will you be one of them?