Bab el-Mandeb in Flames: Brent at $104.60 as Yields Cap Gold at $4,132

Red Sea and Bab el-Mandeb: violent overnight escalation

Overnight military clashes between Saudi-backed forces and Houthi fighters intensified sharply around the Red Sea and the Bab el-Mandeb chokepoint, keeping global supply security on a knife-edge. The direct threat to critical transit points pushed Brent crude up to USD 104.60 per barrel, and oil is now firmly cementing above USD 104. Missile intercepts and fears of a wider transit blockade added a fresh geopolitical risk premium to prompt contracts.

Saudi energy corridors under missile threat

Cross-border missile launches targeted Saudi energy transit corridors, and intercepts over key energy infrastructure reignited fears of a broader blockade. Higher oil immediately revived inflation concerns through sovereign bond markets, keeping US 10-year yields locked near multi-decade extremes. The Middle East supply friction has overshadowed the temporary relief from Friday’s weak dollar data, and energy-driven yields act as severe mechanical resistance on bullion.

FOMC Minutes, the 10Y auction and yields

The 16:30 EIA Weekly Petroleum Status Report offers a crucial snapshot of US crude stockpiles amid oil prices above USD 104. At 20:00 the FOMC Minutes arrive, the week’s top-tier catalyst, with insight into the Fed debate on interest rates versus energy-driven inflation. Tonight’s 10-year Treasury auction will, together with the Minutes, dictate gold’s trajectory, and continuous yield tracking remains the real-time compass for gold flows at the US cash open. Friday’s NFP miss was swiftly erased, though its delayed impact could still support gold if the Fed sounds dovish.

Liquidity and positioning

Gold carved out a consolidation floor right above yesterday’s liquidity sweep lows, absorbing institutional selling in a tight intraday range with a firm base above USD 4,120. Yesterday’s sell-side stop hunt left dense clusters of resting buy stops and unfilled imbalances at USD 4,165–4,190, the primary recovery target. The market is balancing the geopolitical bid against aggressive yield pressure ahead of tonight’s catalysts.

Market impact – today’s trading day summary

Gold (XAU/USD) is quoted at USD 4,132.00 per troy ounce and Brent crude at USD 104.60 per barrel.

Level	Zone (USD)
Resistance 2	4,280 – 4,330 – 4,400
Resistance 1	4,165 – 4,200
Key pivot	4,120 – 4,132
Support 1	4,088 – 4,070
Macro support	4,070 and below

A hawkish FOMC and weak auction demand would push yields higher and bring a test of USD 4,070–4,088. A dovish Fed and a strong auction, combined with the delayed NFP impact, could lift gold above USD 4,200, and a daily close above USD 4,200 opens the way towards 4,280 – 4,330 – 4,400.

Scenario odds: 30% bullish, 40% neutral, 30% bearish

This report is prepared by the An Infinity Original team as a daily overview of market and geopolitical developments, based on publicly available sources and market data at the time of publication. It is for informational and analytical purposes only and is not financial advice. Trading on financial markets carries a high risk of capital loss.