Warsh's Hawkish Tone Sends Gold, Silver Prices Lower

Gold and silver prices fell on Friday following Fed Chair Kevin Warsh's hawkish tone at the Jackson Hole Economic Policy Symposium. The precious metals selloff was triggered by Warsh's comments highlighting persistent inflation risks and suggesting potential rate hikes if inflation fails to improve.

The gold-to-silver ratio closed near 67, essentially flat for the week after briefly dipping below the key 66 level. This ratio remains an important indicator of whether silver can begin outperforming gold again.

Warsh's comments at Jackson Hole also highlighted the importance of U.S. Treasury policy and geopolitical risks in driving bullion prices. Treasury Secretary Scott Bessent announced an aggressive sanctions campaign targeting Iran, including nearly 60 entities, individuals, and vessels connected to oil, nuclear, missile, cyber, and other networks.

David McAlvany remains bullish on gold despite the prospect of higher interest rates, arguing that concerns surrounding U.S. deficits and Treasury financing could outweigh traditional headwinds such as higher yields. He expects gold could retest its January highs by late 2026 or the first quarter of 2027.