Gold Price Drops Sharply After Fed Chair Warsh's Jackson Hole Warning

The gold price dropped to $4,375 per troy ounce on September 1 as Fed Chair Kevin Warsh's speech at Jackson Hole delivered a clear warning that inflation was not retreating fast enough and that the Federal Reserve had 'work to do.'

The address on Friday shifted rate expectations decisively, with markets now pricing in approximately a 66.4% probability of a 25-basis-point rate hike at the September FOMC meeting, up from roughly 40% a week earlier.

Higher rates mean a higher opportunity cost for holding a non-yielding asset like gold, which has traded with tight sensitivity to every Fed signal in 2026.

The World Gold Council notes that sustained central bank demand has provided a structural floor under the gold price, and institutional buying does not evaporate because of one speech.