Gold Slumps 1.86% as Warsh's Hawkish Speech Stokes Rate Hike Fears
Gold prices plummeted nearly 1.86% in a weekly slump after US Federal Reserve Chair Kevin Warsh delivered a hawkish speech at the Jackson Hole symposium, sending markets into turmoil.
The MCX gold futures expiring in October dropped 1.63%, while MCX silver futures for September shed 1.66%. Gold futures stood at Rs 1,56,400, and silver futures stood at Rs 2,36,651 per kg on Friday.
Earlier this week, renewed concerns about currency debasement and US Treasury support for long-dated bonds caused the bullion rally to multi-month highs. However, stronger-than-expected economic data led to market pricing in a higher probability of the Fed remaining restrictive for longer.
The hawkish speech from Warsh reset rate expectations, with odds of a September rate hike jumping from roughly 1-in-3 to more than 2-in-5 on the CME FedWatch tool. Year-end rate expectations also rose to their highest level in three weeks.