Gold Prices Plummet as US Fed Hints at Rate Hikes to Combat Inflation

Gold prices plummeted over 1% on August 28, 2026, after the US Federal Reserve hinted at raising interest rates to combat stubborn inflation.

The spot gold price dropped to $4,563.05 per ounce, a significant decline from its three-month high just days ago.

Fed official Kevin Warsh emphasized that tackling inflation is their top priority, citing the 12-month change in the PCE price index at 3.7% and stating 'We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed.'

This warning was further reinforced by new US jobs data showing payrolls dropped by 79,000, putting additional pressure on markets and increasing the likelihood of tighter monetary policy.