Gold Prices Plummet Amid Warsh's Hawkish Outlook and Rising Rate Hike Probability

Gold prices are under pressure due to US Federal Reserve Chair Warsh's hawkish outlook. In his speech at the Jackson Hole Symposium, Warsh expressed concerns over elevated inflation and stated that underlying trends of CPI and PCE inflation readings are not very encouraging. He also emphasized that responsibility for inflation running above the Fed's goal lies squarely with the Federal Reserve.

As a result, gold prices have slumped 3.15% to $4455 on Friday, with a daily loss of ~0.40% at $4436 at the time of writing. The escalation of US-Iran tensions and the surge in oil prices are also adding to downside pressure.

The probability of the Fed hiking rates in its September 16 FOMC meeting stands at 66%, up from 41% seen a week ago. This increase in rate hike possibility is contributing to gold's selling pressure.