Gold Prices Plummet 2.75% as Warsh's Rate Hike Signal Shakes Markets
The gold and silver markets experienced a volatile week, driven by the reverberations from Federal Reserve Chair Kevin Warsh's Jackson Hole speech. On August 29, COMEX gold futures for December delivery plummeted 2.75% after Warsh signaled a potential rate hike, with spot gold falling to $4,430-$4,448 per ounce.
The sell-off was compounded by profit-booking after gold's extraordinary 14% rally in August, fueled by the US Treasury's announcement of increased liquidity-support buyback operations for longer-dated bonds. This move was interpreted as currency debasement and undermined gold's appeal as a non-interest-bearing asset.
In India, domestic gold prices crashed ₹3,160 on August 28, with the national rate for 24-karat gold plunging to ₹1,59,820 per 10 grams. Silver also broke its three-day streak of unchanged national rates on the same day, falling by ₹50 per 10 grams to ₹2,550.