Gold slipped below $4,300 an ounce as a Saudi pipeline shutdown pushed oil prices toward four-month highs, hardening bets on a Federal Reserve rate hike this week. The pullback has pushed gold toward a support zone that traders are watching as a signal for how far the decline could run, with silver's own $60 floor tied to the same outcome.
Oil disruption pressures gold lower
Spot gold fell 0.6% to $4,271.32 an ounce at 05:47 ET (09:47 GMT) on Tuesday. Gold futures declined 1.0% to $4,310.90 over the same stretch. The metal had sunk to a five-week low on Monday as Middle East tensions pushed oil toward four-month peaks.
Saudi Arabia shut its east-west pipeline following attacks by Iran-backed Houthi militants in Yemen. Citing two regional officials, the Associated Press said the 1,200-kilometer pipeline will be offline for three to five weeks while repairs continue, including at a damaged pumping station. Since late August, an average of 2.6 million to 4 million barrels a day flowed through the line, and traders told Reuters a prolonged shutdown could disrupt as much as 4% of global oil supply.
Fed hike bets climb, yields surge
Markets now price about a 92% probability of a rate increase at Wednesday's Fed meeting, up from 59% a week earlier, according to CME FedWatch. Benchmark 10-year Treasury yields have surged above 5%, their highest level in nearly two decades, while the US dollar has firmed — both of which weigh on non-yielding bullion.
FXTM's Lukman Otunuga said markets are entering a week where "oil, central banks and yields could all pull in the same direction", as higher inflation and tighter financial conditions converge with the Fed decision, according to Investing.com.
Support zone comes into focus
Gold trades near $4,267, according to ActionForex, only about $13 above its first key support at $4,254.53. A break below $4,230.70 would open the way toward the next projection at $4,096.06, the firm said. A decisive break above the Dollar Index's 99.79–99.86 resistance zone would complete a double-bottom formation and open the way toward 100.56; a subsequent break above that level would reinforce the case for gold losing support, though gold does not necessarily have to wait for the dollar to get there.
Silver, trading in the low $62s, faces its own defensible floor near $60–$60.44. The physical market provides structural backing: the Silver Institute's World Silver Survey 2026 recorded a 40.3 million-ounce deficit in 2025, with a wider 46.3 million-ounce deficit forecast for 2026, the fifth consecutive annual shortfall.
Sources: Investing.com, ActionForex
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