Gold Prices Plummet as Saudi Pipeline Shutdown Sparks Inflation Fears

Gold prices have plummeted below $4,300 per ounce on Tuesday as Saudi Arabia's shutdown of its east-west pipeline has amplified inflation worries. The disruption is expected to remove around 4% of global oil supply and push Brent crude up by 2% to $107.70 per barrel.

The surge in crude oil prices has increased the likelihood of a Federal Reserve rate hike, with odds now standing at 92%, according to CME FedWatch data. This marks a significant increase from just last week, when traders assigned only a 59% chance to a rate increase at the Fed's two-day meeting concluding on Wednesday.

Gold's decline is also being exacerbated by rising yields and dollar strength, making bullion more expensive for buyers using other currencies. The U.S. Treasury yield has breached the 5% threshold for the first time in nearly two decades, while the dollar index has strengthened.