Gold and Silver Prices Slip as Oil Prices Rise Amid Middle East Tensions

Spot gold and silver prices declined in early U.S. trading on Wednesday, with gold around $4,054.60 an ounce, down $6.36 (0.16%), and silver near $54.20 an ounce, down $0.20 (0.40%). The moves came as crude oil prices rose following a missile attack claimed by Houthi forces on Saudi Arabia's Ras Tanura refinery, adding uncertainty to energy markets.

Traders remain focused on the Federal Reserve’s policy decision later in the day, assigning roughly an 84% chance of at least one more rate increase by December. The Federal Open Market Committee is expected to keep the federal-funds target range at 3.75%-4.00%, with attention shifting to the accompanying statement and the chair’s outlook on inflation and employment.

Higher oil prices and a firm U.S. dollar are limiting gold’s appeal despite geopolitical concerns, while silver faces additional pressure from its industrial demand exposure and elevated borrowing costs.

"The combination of elevated yields, a firm dollar and persistent expectations for additional Fed tightening continues to limit gold's ability to attract sustained buying interest despite geopolitical uncertainty," a market analyst said.

The Strait of Hormuz remains a source of volatility, and the lack of confirmation from Saudi authorities on the refinery damage leaves the operational impact unclear. Continued attacks and unresolved U.S.–Iran negotiations sustain a risk premium in energy markets.

Global equity markets were mixed ahead of the Fed decision and upcoming earnings reports, with technology shares showing renewed interest while concerns about corporate financing persisted. European and Asian markets also reflected mixed sentiment as central banks in the eurozone and Japan prepare to announce policy decisions.

Crude oil futures traded near $101 per barrel for WTI and $115 for Brent, while the 10-year U.S. Treasury yield hovered around 5.0% and the dollar index remained firm.