Gold Prices Drop as Fed Officials' Hawkish Comments Loom

Gold prices dropped on Friday as investors awaited Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole symposium. Spot gold fell 0.5% to $4,576.30 per ounce by 0157 GMT after reaching a more than three-month high earlier in the week.

The US Treasury's announcement of support measures for long-duration bonds had boosted gold prices this week. However, analysts say that Fed officials' hawkish comments may have contributed to the decline in gold prices.

Market participants see a 33.9% chance of a US rate hike in September and a 74% chance by December, according to the CME FedWatch tool. Despite its role as an inflation hedge, gold tends to lose appeal in a high interest rate environment due to offering no yield.