Gold Prices Plummet 3.24% Following Hawkish Fed Speech
The sharp decline in gold prices on Friday came as a hawkish speech from Federal Reserve Chairman Kevin Warsh at the Jackson Hole Economic Symposium triggered a selloff in December gold futures. The price fell $150.70, or 3.24%, to close at $4,504.10.
Gold's seven-session rally had come to an end, with prices clearing the 38.2% Fibonacci retracement at $4,692 on Monday and briefly approaching the 50% level at $4,900. However, a hotter-than-expected Personal Consumption Expenditures report for July strengthened the dollar and pressured gold.
The weekly gain was entirely erased as gold opened at $4,656, briefly reached a high of $4,688, but failed to reclaim the 38.2% Fibonacci level before selling off sharply. The close places price directly at the Ichimoku Lagging Span, with the cloud below.
Despite the sharp decline, the broader thesis remains intact, supported by a $40 trillion national debt, sticky inflation, and a Fed with limited room to maneuver. The targets remain unchanged: $4,692 must be reclaimed for near-term risk-reward to shift back in favor of bulls, and $4,900 remains the medium-term objective within the next 30 to 60 days.