Gold Price Plunges as Fed Hawkishness Reignites Rate Hike Fears

The gold market has hit a speed bump after Federal Reserve Chair Kevin Warsh's hawkish comments at the Annual Central Bank Symposium in Jackson Hole, Wyoming. The price of spot gold fell by nearly 3% for the week to $4,473.80 an ounce.

Warsh reiterated the U.S. central bank's commitment to bringing inflation down to its 2% target and said that underlying inflation is more of a concern than the slowing labor market. This has led to renewed expectations of a rate hike in September, with markets now seeing a 55% chance.

Despite this, analysts believe there are still '40 trillion reasons' to stay bullish on gold, citing ongoing fiscal concerns and economic uncertainty. David Morrison, Senior Market Analyst at Trade Nation, said that gold is overbought but has plenty of upside potential for the rest of the year.