Warsh's Hawkish Stance Sends Gold Prices into a Tailspin
Gold prices remained steady on Monday after plummeting by over 3% in the previous session, following US Federal Reserve Chair Kevin Warsh's hawkish comments. Warsh signaled that interest rate hikes may be needed to curb inflation, which sent shockwaves through the market.
The spot price of gold held its ground at $4,455.29 per ounce by 0011 GMT after hitting a low since August 19 earlier in the session. US gold futures for December delivery fell 0.6% to $4,504.90, weighed down by the prospect of higher interest rates.
Warsh's comments on Friday came closer than ever to acknowledging that rate hikes may be necessary to ease price pressures. Markets now see a 57% chance of a rate hike at the Fed's next policy meeting in September, up from 36% prior to Warsh's remarks.