Gold Prices Plunge as Hawkish Fed Speech Sparks Rate Hike Bets

A sharp drop in gold prices occurred over the last three trading days of August, following a hawkish speech by Fed Chair Kevin Warsh at the Jackson Hole conference. Spot gold fell to its lowest point for the period on Friday, August 28, after closing at $4,730.90 an ounce intraday earlier that week.

The decline in gold prices was attributed to Warsh's comments, which made markets think a rate hike could come as soon as September and higher rates make gold less attractive since it pays no interest.

This correction comes after an unusually strong run for gold, with prices rallying more than 13% through August alone. However, the last three sessions look more like profit-booking after a fast, momentum-driven spike rather than a genuine reversal of the underlying trend.