Warsh's Hawkish Comments Spark Selloff in Gold and Silver

Gold and silver prices took a hit after Federal Reserve Chair Kevin Warsh delivered his speech at Jackson Hole. Before Warsh's remarks, gold had reached its recent peak, but it quickly gave back some of its gains as investors reacted to the Fed chair's comments on inflation.

The price of silver also plummeted, falling from above $71 to around $66.5, a decline of over 4%. The reversal was sudden and dramatic, with Curious | Macro Lens pointing out that the move through $70 and briefly above $71 had been an important liquidity area.

Warsh's speech emphasized the importance of controlling inflation, which he said was running at 3.7% over the previous 12 months, well above the Fed's target of 2%. He also noted that recent increases in commodity prices were something to watch.

Oren Elbaz, known as The Silver Hermit, questioned whether Warsh can actually deliver on his promises of higher interest rates, citing concerns about financial markets and government debt. While Elbaz views Warsh's comments as an attempt to influence expectations rather than a guarantee of action, the speech did seem to shift market sentiment towards a more hawkish stance.