A slump in gold futures led the precious metals market lower on Tuesday (4 October), as traders priced in heightened expectations of an interest rate hike by the US Federal Reserve.

At 4:17pm BST, Comex gold futures for December delivery were down 2.11% or $27.70 to $1,285 an ounce; the contract's first slide below $1,300 since 24 June, the day after the UK voted to leave the European Union.

Jameel Ahmad, vice president of market research at FXTM, said gold's breach of $1,300 level, which had been acting as the lower range for the metal since the EU Referendum, was a significant development in the wider scheme of the precious metals market.

"The momentum of sellers is likely to drag the price of gold lower down the charts. The dollar is steadily regaining some momentum across the currency markets and if US interest rate expectations increase over the upcoming days we can expect further losses for the yellow metal.

"Near-term support can be found slightly above $1,280, although it wouldn't surprise me if gold dropped all the way to where it was valued on the day of the EU referendum, i.e. $1,250."

Concurrently, the Comex silver contract for December plunged by an even steeper 3.57% or 67 cents to $18.20 an ounce, having risen to an intraday high of $19.51 an ounce as recently as 30 September.

Meanwhile, the oil market continues to search for direction while staying on a positive patch in the wake of Opec's decision to cut production, with further details expected on 30 November at the cartel's next meeting in Vienna, Austria.

Late on 28 September, Opec said it had agreed to limit production to a range of 32.5m to 33m barrels per day (bpd) led by the Saudis. At 4:31pm BST, the Brent front month futures contract was up 0.55% or 28 cents to $51.17 per barrel, while the West Texas Intermediate rose 0.29% or 14 cents to $48.95 per barrel.

Analysts at Morgan Stanley said focus was now rapidly turning to how Opec would execute its proposed cut. "Even with an agreement at the 30 November meeting, actual reductions in Opec production probably won't be fully in place until sometime in 2017. In the interim, Opec will look to non-Opec producers for additional support, with Russia signaling a willingness to freeze production at record levels, but not cut."

Without caps on Libya, Nigeria or Iran, Opec could easily exceed 33 million bpd based on country level targets discussed in Algiers thus far. That's before considering any quota busting that may occur. In other words, outsized reductions from other producers, such as Saudi Arabia, may be required – "a tough ask", in the view of the bank's analysts.