Gold Tumbles to Near Two-Week Low on Hawkish Fed Stance
Gold prices hit their lowest in nearly two weeks on Wednesday after Federal Reserve Chair Kevin Warsh signaled that interest rate hikes may be necessary to combat inflation. The price of spot gold fell 0.8% to $4,417.04 per ounce, its weakest level since August 19. US gold futures also declined by 1.4% to $4,466.80.
The downturn in gold prices comes as tensions between the US and Iran escalate, fueling inflation fears and putting upward pressure on oil prices. According to Tim Waterer, chief market analyst at KCM Trade, 'Gold is still licking its wounds after the hawkish tone struck by Warsh at Jackson Hole.'
The Fed's potential interest rate hike has also weighed on gold, as it typically loses appeal in a rising interest rate environment due to its lack of yield.