- The markets plunged as global gold prices fell by more than 1% to drop below $4,200 an ounce.

At 21:40 Saudi time, the spot gold price recorded $4,150 per ounce, while the futures contract was $4,152 per ounce.

Shares of AI giant Nvidia fell by more than 5%, causing a widespread decline on Wall Street today, with the Nasdaq index down by 2.54%, and the Dow Jones index dropping 654 points, while the S&P 500 standard lost 1.70%.

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The drop in Wall Street may have been one of the drivers behind today's strong decline in gold prices as traders utilize gold to cover losing positions in the stock markets.

The decline also extends to the U.S. dollar index, where we see nothing trading higher now whether it be a risk asset or a safe haven, with the U.S. dollar index measuring the currency's strength against a basket of major currencies at 98.992.

The decline comes amid the uncertainty surrounding U.S. data stuck due to the 42-day government shutdown, which is the longest in U.S. history.

Markets speculate that the Trump administration refuses to disclose data for September and October due to the severity of the downturn, as the White House announced that the labor market data for September will be released without estimating the unemployment rate.

Statements from Federal officials

For the first time, expectations for a rate cut in December have fallen below 50% with a series of Federal statements suggesting that the Federal Reserve should proceed cautiously, emphasizing the message from Chairman Jerome Powell announced last month that the Federal Reserve should tread carefully amid the foggy landscape, as excessive sudden monetary easing could harm the economy and inflation.

Cleveland Federal Reserve President Beth Hamak stated on Thursday that interest rates should remain restrictive to combat ongoing inflation concerns.

During her speech at the Pittsburgh Economic Club, Hamak described the current environment as "a tough time for monetary policy" given the challenges facing the Federal Reserve's dual mandate of price stability and maximizing employment.

Hamak stated: "When I look at both things overall, I think we need to stay somewhat restrictive to continue to pressure inflation toward our target."

Mary Daly, president of the Federal Reserve Bank of San Francisco, said on Thursday that it is too early to determine whether a rate cut is appropriate in December, although she indicated that the general trend for interest rates is downward.

"I have an open mind, but I haven’t made a final decision on what I think," Daly stated at an event in Dublin, Ireland. "In my opinion, it is too early to say definitively no cut or definitely cut."

Daly emphasized that uncertainty in the U.S. economy has decreased significantly, describing the current economic climate as "cautious optimism." She noted that while inflation is trending downward, it remains stubborn, and the Federal Reserve still needs to work to bring it down to its target of 2%.

According to Daly, the labor market has "slowed significantly," and she believes there is value in waiting to make interest rate decisions until more information is available.

Susan Collins, a voting member of the Federal Open Market Committee (FOMC) who is considered a moderate, expressed her caution about further rate cuts due to a lack of data. Collins said in prepared remarks on Wednesday: "In the absence of evidence of a significant deterioration in the labor market, I would be hesitant to ease policy further, especially given the limited information on inflation due to the government shutdown."

As traders continue to reduce their bets that the Federal Reserve will cut interest rates at its next meeting, the odds have now fallen to below 50%. The probability of a rate cut at the Federal Reserve meeting on December 10 is now 47.4%, down from 62.8% last week and 96% last month.

This sharp decline is partly due to the recent U.S. government shutdown, which limited the availability of economic data. As a result, Federal Reserve officials feel they are "working in the dark." Additionally, no inflation remains relatively high.