Gold Prices Fall After Fed Chair Warsh Signals More Rate Hikes Could Be Coming
TLDR
- Gold is up about 10% in August, its strongest monthly gain since January
- Fed Chair Kevin Warsh’s hawkish inflation comments triggered a 3.2% drop on Friday
- Markets now price a 57% chance of a September rate hike, pressuring gold
- Rising oil prices after U.S.-Iran military exchanges are adding to inflation concerns
- The U.S. Treasury’s bond purchases earlier this month helped fuel August’s rally
Gold prices slipped on Monday as investors weighed the Federal Reserve’s latest signals on interest rates. Despite the pullback, gold is still on track for its best month since January, up around 10% in August.
As of Monday morning, gold spot prices fell 0.4% to $4,438.30 an ounce. Gold futures dropped 0.9% to $4,488.41.
The drop follows a sharp 3.2% decline on Friday, gold’s biggest single-day fall since early June. That sell-off came after Fed Chair Kevin Warsh said at Jackson Hole that the Fed still has work to do to bring inflation down to its 2% target.
Fed Rate Hike Bets Rise
Warsh’s comments shifted market expectations fast. Traders now price roughly a 57% probability of a September rate hike, according to CME’s FedWatch tool.
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