Gold and Silver Slip Below $4,000 as Fed Outlook and Middle East Tensions Pressure Markets

Spot gold and silver prices declined in early U.S. trading on Tuesday, reflecting expectations of additional Federal Reserve tightening and lingering uncertainty over Middle East energy supplies. Gold slipped to about $3,994.60 an ounce, down 0.54%, while silver fell to $52.75 an ounce, a 2.03% drop.

Market participants are betting on a likely Fed pause at its Oct. 27-28 meeting, though futures still assign roughly a 73% chance of at least one more rate hike before year-end. September consumer-price data showed a 0.6% monthly rise and a 3.7% annual increase, while producer prices rose 1.3% month-over-month.

The benchmark 10-year Treasury yield hovered near 4.98%, easing slightly as crude prices softened and demand for government bonds rose. However, oil prices remained elevated, with Brent near $116.24 a barrel and WTI around $102.07, as renewed Houthi attacks in the Strait of Hormuz revived concerns about regional supply disruptions.

Diplomatic talks involving Iran, Saudi Arabia, Turkey and Pakistan in Tehran aimed to reduce tensions, but no settlement with Washington was announced and the broader U.S.–Iran confrontation remains unresolved.

U.S. durable-goods orders rose 1.8% in September, beating forecasts, while upcoming data releases include home-price indexes, consumer confidence, new-home sales and the Fed’s policy decision. Analysts note that softer economic data could temper expectations for a December rate hike, potentially supporting gold through lower yields and a weaker dollar, whereas stronger figures would reinforce a restrictive monetary stance.

Global equity futures edged higher ahead of the Fed announcement, with modest gains in Dow, S&P 500 and Nasdaq futures, buoyed by better-than-expected corporate earnings and renewed interest in technology and AI stocks. Investors also await policy signals from the European Central Bank and Bank of Japan later in the week.