Gold Price Tumbles as Hawkish Fed Suggests Higher Interest Rates

Federal Reserve Chair Kevin Warsh delivered a hawkish message at the Jackson Hole gathering on Friday, underscoring the central bank's resolve to contain inflation. Bart Melek, who leads commodity research at TD Securities, said this posture could create meaningful near-term resistance for gold.

Warsh warned that inflation is not easing at a convincing pace and stressed that policymakers must guide it back to the 2% objective, which he called firm and fixed. He also noted that financial conditions are not restrictive at present.

The market read these comments as raising the odds of rate increases in September and December, a notable departure from earlier expectations. This repricing pushed short-term rates higher and strengthened the dollar, pulling gold down roughly $125 to $4,470 per ounce at the time of writing.