Warsh's Hawkish Speech Triggers Sharp Selloff in Commodity Market

US Federal Reserve Chairman Kevin Warsh's hawkish speech triggered a sharp selloff in the commodity market, with gold recording its biggest fall since July. In his first speech after taking charge as Fed chair in May, Warsh took a strong stand against inflation, saying that bringing it back to the 2% target remains his firm priority.

The markets interpreted his comments as hawkish, pushing up the dollar index and putting pressure on precious metals. Gold prices in the global market fell by as much as 3.5%, with COMEX gold dropping USD 161 to USD 4,502 per ounce. In Indian currency terms, the price fell by around Rs 4,941 to nearly Rs 1.38 lakh per 10 grams.

Silver also witnessed a sharp fall of 4.5%, its price dropped USD 3.12 to USD 66.31 per ounce. In Indian currency terms, silver became cheaper by around Rs 9,576 per kg to nearly Rs 2.03 lakh. Despite the sharp fall, recent buying shows that investor interest in gold remains strong.