Gold Price Falls Below $4,300 as Fed Rate Hike Odds Hit 92% After Saudi Pipeline Shutdown
TLDR
- Gold fell 0.6% to $4,271 an ounce, hitting a five-week low
- Oil prices jumped after Saudi Arabia shut its east-west pipeline due to Houthi militant attacks
- Markets now price a 92% chance of a Fed rate hike at Wednesday’s meeting, up from 59% a week ago
- U.S. 10-year Treasury yields climbed above 5%, their highest in nearly two decades
- Higher rates and a stronger dollar both pressure gold, which pays no interest
Gold prices dropped sharply on Tuesday, falling below $4,300 an ounce as rising oil prices stoked inflation fears ahead of a key Federal Reserve decision.
Spot gold fell 0.6% to $4,271.32 an ounce. Gold futures dropped 1.0% to $4,310.90 an ounce in early trading.
The metal had already hit a five-week low on Monday. The slide continued Tuesday as energy markets added more pressure.
Oil Disruption Drives Inflation Fears
Saudi Arabia shut its east-west pipeline after Iran-backed Houthi militants in Yemen attacked it. The 1,200-kilometer pipeline is expected to be offline for three to five weeks while repairs are made, including at a key pumping station.
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