Gold Prices Plummet Amid Fed's Hawkish Stance
Gold prices plummeted on Monday, hitting near a two-week low after US Federal Reserve Chair Kevin Warsh signaled that interest rate hikes may be necessary to ease price pressures.
The spot gold price fell by 0.8% to $4,417.04 per ounce at 0406 GMT, marking its weakest level since August 19.
This decline follows the Fed's signal that rate hikes may be needed to combat inflation, which has been fueled by escalating Middle East tensions and a surge in oil prices.
Tim Waterer, chief market analyst at KCM Trade, noted that gold is typically unappealing in a rising interest rate environment as it does not yield interest.
The Fed's hawkish stance and the potential for future rate hikes have contributed to gold's woes, while markets currently see a 60% chance of a September rate hike, according to the CME FedWatch tool.