Warsh’s Hawkish Comments Spark Gold Crash

Gold prices plummeted on Friday by the largest margin in over a month due to comments made by Fed Chairman Warsh at the Jackson Hole conference. In his first address since becoming chairman, Warsh reiterated concerns about inflation, sparking bets of rate hikes.

The SPDR Gold Shares ETF (GLD) dropped as the US dollar and Treasury yields rose. This reaction suggests investors are pricing in higher interest rates, which would make gold less attractive as a safe-haven asset.

Warsh's comments at Jackson Hole pushed inflation concerns to the forefront of investors' minds, leading them to bet on rate hikes. This shift in sentiment weighed heavily on gold prices, causing the largest drop in over a month.