Gold Prices Plummet as Salalah Meeting Postponed and Saudi Pipeline Shut Down

On Sunday, Oman's foreign minister announced that the Salalah meeting has been postponed indefinitely due to ongoing diplomatic efforts seeking consensus.

The news led to a sharp decline in gold prices, with a drop of approximately $77 during trading, hovering around $4,331. The previous rally fueled by expectations of diplomatic de-escalation was swiftly invalidated following the announcement that the meeting had been canceled.

Saudi Arabia's east-west oil pipeline has been shut down as an emergency measure due to repeated drone attacks originating in Iraq. The daily capacity of this pipeline is 4 to 5 million barrels, enabling the kingdom to bypass the Strait of Hormuz and deliver oil to the Red Sea port of Yanbu.

The market is pricing a 90% probability of a Fed rate hike on Wednesday, which could further weigh on precious metal prices. Silver's price volatility has been significantly higher than gold's, with it taking the lead in falling since last Friday's close at $65.19.