Gold Under Pressure as Fed Hawkishness and Hormuz Tensions Mount
Gold prices have been under pressure due to hawkish statements from Fed Chairman Kevin Warsh and escalating tensions in the Strait of Hormuz. The precious metal, which had tested its highest levels in three months last week, continues to see a sharp selling wave that began after Warsh's comments at the Jackson Hole meeting.
The spot price of gold fell 0.3% to $4,437.10 per ounce on the second trading day of the week, while US gold futures were trading 0.1% higher at $4,485.30. This decline is attributed to Warsh's emphasis that the Fed has 'work to do' until inflation reaches its 2% target.
CME FedWatch data indicates a 66% chance of a rate hike in September and an 89% chance in December, which has reduced the appeal of gold. US President Donald Trump also supported Warsh, saying he expects him to 'do what needs to be done.'