Gold Slumps Below Starting Point as Rate Hike Fears Mount

The US Treasury Department's announcement of a major monetary pivot on August 19 sent shockwaves through financial markets, causing significant gains for several assets. Gold and Bitcoin were among those that benefited, with gold surging to $4,700 per ounce on August 25 and Bitcoin reaching $81,500 last week.

However, the landscape has since changed, particularly for gold. Following a hawkish speech by new Federal Reserve Chairman Kevin Warsh at Jackson Hole, markets interpreted this as a sign of upcoming rate hikes, causing gold to plummet to $4,300 earlier today.

This means that gold not only gave up all its gains but also dropped below its starting level, down by over 8.5% from the local peak. Meanwhile, Bitcoin has fallen from $81,000 but remains 20% higher than $64,000, where its run began.