Gold Prices Plummet as Fed's Warsh Signals Possible Rate Hike
Gold prices plummeted on Friday as traders reacted to Federal Reserve Chairman Kevin Warsh's comments at the Jackson Hole symposium. According to independent analyst Tai Wong, Gold is getting 'slapped hard' after Chair Warsh stated that inflation isn't meaningfully slowing and the Fed has 'work to do.' This marked the closest he has come to acknowledging interest rate hikes may be needed to ease price pressures.
As a result, traders increased bets on an interest rate hike in September, with a 56% chance now seen compared to 36% before Warsh's comments. The CME FedWatch tool also reported an 80% chance of a December increase. This shift in sentiment led to the dollar rising to over one-week high, making greenback-priced bullion more expensive for holders of other currencies.