Gold Slumps as Hawkish Fed Expectations Weigh on Prices

Gold prices hovered near $4,450 on Monday after opening lower and briefly dipping below $4,400 in Asian trading hours. However, the metal lacked strong upside momentum due to hawkish Federal Reserve expectations keeping buyers cautious.

The precious metal fell about 3.20% on Friday following Fed Chair Kevin Warsh's speech at the Jackson Hole Symposium, which revived expectations of a rate hike as soon as September and pushed the US Dollar and short-term US Treasury yields sharply higher.

Analysts at Rabobank noted that Warsh emphasized his openness to further rate hikes unless underlying inflation improved convincingly. The CME FedWatch tool showed markets pricing in around a 61% chance of a September rate hike, up from roughly 38% before Warsh's speech.