Gold Market on Edge Ahead of Warsh's Jackson Hole Keynote

America's gold market has been on edge since January, when Kevin Warsh was named the next Fed chair. Spot gold fell roughly 9% that same session, and silver futures had their worst day since March 1980, settling down 31.4%. The market just remembered his reputation and repriced everything at once.

Now, Warsh is set to deliver his first Jackson Hole keynote as chair on Friday, and the gold market is bracing for impact. Gold is trading near $4,588 an ounce this morning, down about 0.1% on the day after touching a three-month high earlier in the week.

The rally isn't broken, but almost nobody wants to be caught leaning the wrong way before a man with Warsh's track record speaks. Wednesday's inflation data did some immediate damage, showing headline prices up 0.2% for the month and annual inflation at 3.7%, well above the Fed's 2% target.

The Treasury has been managing a growing debt load, doubling its buyback operations for longer-dated bonds about a week ago. This fiscal signal outlasts any single Fed meeting, which is why gold is still up 14% to 15% this month despite today's pullback, on pace for its strongest August since 1999.