Gold Price Drops on Hawkish US Federal Reserve Stance

Gold prices dropped nearly 1.86% last week due to a hawkish stance by the US Federal Reserve, led by Chairman Kevin Warsh.

The Fed's more restrictive monetary policy expectations led investors to reassess their positions in gold and other commodities.

Inflation data for July showed a higher-than-expected 3.7% year-over-year increase, which added to concerns about currency debasement and the US Treasury's support for long-dated bonds.

As a result, the odds of a September rate hike jumped from 1-in-3 to more than 2-in-5 on the CME FedWatch tool, with year-end rate expectations rising to their highest level in three weeks.