Gold Prices Face Turning Point as Interest Rate Hikes Loom
Gold prices faced significant pressure at the end of last week after US Federal Reserve Chairman Kevin Warsh issued a strong signal on inflation, increasing expectations of interest rate hikes.
The upward momentum that had driven gold futures to a three-month high of $4,697.66 per ounce began to weaken from mid-week following the release of the US July PCE report, which showed inflation remained high at 3.7% year-over-year.
However, it was Warsh's speech at the Jackson Hole conference that triggered a sharp reversal in gold prices, with December futures falling $150.70 per ounce to $4,504.10 and spot gold prices dropping to $4,445.45 per ounce.
Technically, gold prices have closed below their 200-day moving average of around $4,641 per ounce, shifting the threshold from support to resistance in the coming sessions.