On December 11th, New York gold broke above $2750 and began a sharp decline on December 12th, which continued for the next five trading days. After the latest statement from the Federal Reserve, the selling pressure on gold continued.

The Federal Reserve implemented the expected 25 basis point rate cut, but what was truly surprising was the latest Summary of Economic Forecasts (SEP). This document includes an updated 'dot plot' that reveals revised interest rate forecasts for the period from 2024 to 2027. The dot plot is released quarterly during the alternating period of Federal Open Market Committee (FOMC) meetings, providing anonymous predictions of the future federal funds rate by 19 members of the Federal Reserve.

Compared to the forecast for September, the dot plot shows significant changes. Most notably, it indicates that the Federal Reserve intends to reduce the number of interest rate cuts next year from four to only two 0.25%. It has been proven that market expectations are much tougher than this stance, with only one rate cut expected. However, Chairman Powell hinted at this policy shift in several speeches before the silence before the meeting.

This statement has had a wide-ranging impact on the US financial market. With the stock market plummeting, gold prices have dropped significantly by over $60 per ounce. The most active February gold contract opened at $2663.30 and closed at $2599.6, down $63.90 per ounce previously. Thursday's trading showed a mild recovery, with gold opening at $2600.60 and closing at $2610, a net increase of $10.40, or 0.40%.

In terms of the relevant situation, President elect Trump announced a breakthrough in government funding and debt ceiling negotiations, just one day before the possible government shutdown. The proposed bill will extend government funding for three months and authorize an increase in borrowing before January 30, 2027. Trump also advocates that Congress consider completely canceling or raising the debt ceiling.

However, the passage of the bill is still uncertain and requires bipartisan support from both the Democratic and Republican parties in Congress. A particularly controversial aspect of the proposal involves Trump's provision to suspend the national debt ceiling from January 1 next year to January 30, 2027, which is widely considered challenging to implement.