Gold Extends Decline as Hawkish Warsh Hangover Weighs on Markets
Gold prices continued their downward trend on Monday, extending Friday's sharp selloff that saw spot gold fall roughly 3% to around $4,450 an ounce. The decline was sparked by Federal Reserve Chair Kevin Warsh's hawkish Jackson Hole remarks, which reinforced the central bank's focus on bringing inflation back to target.
Warsh's comments prompted traders to lift their expectations for a September rate hike, lifting Treasury yields and the dollar and increasing the opportunity cost of holding non-yielding gold. The absence of any fresh catalysts over the weekend or into Monday's session meant the continued softness in gold looked to reflect ongoing position adjustment rather than any new development.
Attention now turns to the upcoming August jobs and inflation data, which will be the key test of whether Warsh's hawkish framing is validated or whether softer prints reopen the door to a Fed hold in September. Until then, gold looks likely to remain sensitive to shifts in rate expectations and dollar strength, with Monday's session offering little in the way of a fresh directional signal beyond the continuation of Friday's move.