Gold and Silver Rip Higher as the Fed-Hike Selloff Reverses

Published: 09-17-2026, 09:34 am

The gold and silver rebound picked up speed in early U.S. trading Thursday. Both metals clawed back a chunk of the selloff that followed Wednesday’s Federal Reserve rate hike. Gold last traded at $4,368.71 an ounce, up 2.47% on the session. It had dipped as low as $4,257.57 overnight. Silver ran well ahead of it. It climbed 3.94% to $65.45. That pulled the gold-silver ratio down to roughly 66.8 ounces of silver per ounce of gold.

Why Are Gold and Silver Rebounding Today?

The rebound traces back to the oil market, not directly to the Fed. A drone attack around September 10 forced Saudi Arabia to shut down its entire East-West pipeline. The line normally carries four to five million barrels a day toward the Red Sea. That is a bigger deal than it sounds. Saudi oil traders and analysts warned that a prolonged outage could put up to 4% of global oil supply at risk, or roughly four million barrels a day. It is also a far larger disruption than an earlier attack on the same pipeline back in April. That one cut only about 700,000 barrels a day of capacity, and it was repaired within days.

As a result, Brent crude spiked to a four-month high near $109 a barrel this week. That spike is what pushed the 10-year Treasury yield higher. It hit 5.04% on Tuesday, its highest level since July 2007. Higher yields make non-yielding gold less attractive to hold. So the combination dragged both metals down to a six-week low, just before the Fed’s decision.

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Is the Saudi Pipeline Repair Already Moving Oil Prices?

Since then, Saudi Aramco has started repairing the damage. The company is reportedly bypassing the destroyed section. It aims to restore about half of the pipeline’s capacity within days. Full operation is expected in about six weeks. That timeline alone was enough to pull West Texas Intermediate back toward $102 a barrel. That is its steepest drop since early August. Brent eased toward $106 too. As the oil-driven inflation scare cooled, so did the pressure on Treasury yields. That is the direct cause of the gold and silver rebound now underway.

Why Does a Lower Bond Yield Push Gold Higher?

The mechanism here is a familiar one for anyone who tracks gold closely. Gold carries almost no industrial demand. So its price largely tracks real yields instead. When the inflation-adjusted cost of holding cash falls, gold tends to rise. In practice, a 25 basis point move in real yields typically moves gold by $40 to $60 an ounce. Thursday’s yield pullback, however modest, is doing exactly that.

Why Is Silver Outperforming Gold Today?

Silver’s move goes further than the yield story alone can explain. Roughly 58% of the metal’s annual demand comes from industrial uses. Solar panels, electronics, and grid infrastructure lead that list. That demand sits on top of a supply deficit too. The Silver Institute has now tracked that deficit for six consecutive years. As a result, silver typically moves further than gold in both directions. Thursday is no exception. Its percentage gain is running about 59% larger than gold’s.

What Did the Bank of England Just Decide?

Meanwhile, a Bank of England decision added a secondary current to the dollar backdrop feeding today’s gold and silver rebound. The Monetary Policy Committee held its benchmark rate at 3.75% Thursday. The vote was 6-3, the same split as July. Three members again pushed for an immediate rise. That hold does little to change the near-term picture for dollar-denominated gold and silver. Still, it keeps the wider rate-differential story intact heading into the fourth quarter.

Does This Change the Fed’s Rate-Hike Outlook?

None of this erases Wednesday’s hawkish signal from the Fed. The central bank still projects another rate hike before year-end. What today’s gold and silver rebound really shows is different, though. It shows how sensitive this rally is to the oil market specifically, and not only to the Fed. So long as the pipeline repair stays on schedule, and the Strait of Hormuz situation doesn’t deteriorate further, the path of least resistance for both metals runs through Riyadh nearly as much as it runs through Washington.

SOURCES
1. Federal Reserve — FOMC Statement and Summary of Economic Projections
2. Bank of England — Monetary Policy Summary and Minutes, September 2026
3. Reuters — Saudi Pipeline Outage Threatens Loss Of 4% Of Global Oil Supply
4. CNBC — Oil: What Next as Saudi Arabia Scrambles to Restore East-West Pipeline
5. CNBC — Oil Prices Fall After U.S. Says Damaged Saudi Pipeline Will Restart Operations in Days
6. CNBC — 10-Year Treasury Yield Hits Highest Level Since 2007 as Traders Bet a Fed Rate Hike Is Coming
7. Silver Institute — World Silver Survey 2026
8. Price benchmarks per CME Group and LBMA spot references.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions. 

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