Gold Price Tumbles on Rate Hike Fears and Middle East Tensions
Gold prices plummeted to their lowest level in nearly two weeks on Monday, reaching $4,417.04 an ounce, following Federal Reserve Chair Kevin Warsh's hawkish tone at Jackson Hole.
The decline of 0.8% came as investors factored in the possibility of higher interest rates to combat inflation, which typically makes gold less attractive since it does not generate income.
Warsh's remarks at the economic symposium on Friday sent a clear signal that policymakers may need to take decisive action to meet their 2% inflation target, with markets currently assigning a 60% probability of a U.S. rate hike in September.
The escalation of tensions in the Middle East also fueled concerns about inflation, as oil prices rose more than 2% following reports of U.S. military strikes on Iranian targets.