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At the beginning of the new year, the precious metals market has shown obvious fluctuations. On the morning of January 2nd, both gold and silver prices rose—gold increased by over 0.5%, and silver surged more than 1.3%. The underlying logic is not complicated: escalating geopolitical conflicts combined with expectations of Federal Reserve rate cuts continue to boost the appeal of safe-haven assets. As we enter 2026, the interaction of these two forces is adding uncertainty to the precious metals market and the entire risk asset market.

Interestingly, there are significant disagreements among various parties regarding when and how the Federal Reserve will cut rates.

Moody's Chief Economist Mark Zandi's view is the most aggressive—he believes that once employment data worsens and inflation expectations fluctuate more intensely, coupled with political pressure, the Fed could initiate three rate cuts in the first half of 2026. It sounds somewhat radical, but this logic does exist.

However, market participants are much more conservative. The futures market pricing reflects a more cautious expectation: investors are currently betting only on two rate cuts in 2026, and generally believe the first cut will not occur until after April.

The most conservative stance comes from Federal Reserve officials themselves. The latest dot plot shows that most officials believe only one rate cut will be needed in 2026, with language emphasizing that the pace of rate cuts will be "quite restrained"—essentially saying: don't rush, we will be very cautious.

In the short term, according to CME FedWatch Tool, the market assigns slightly over a 50% probability to a rate cut in March, but the chance of a rate cut in January is minimal. Gold and silver prices will continue to closely follow these expectations, and the debate over "when to cut and how much" is gradually entering a critical stage.