Gold Prices Plummet as Warsh's Hawkish Speech Lifts Rate Hike Expectations

The price of gold fell on Monday following its biggest decline in months on Friday. According to analysts, this is due to Federal Reserve chair Kevin Warsh's speech calling for Fed action to cool inflation, as well as renewed tensions with Iran.

Gold futures are priced at around $4,475 as of just after 10 a.m. EDT on Monday, down more than 1%. This decline comes after gold fell by over 3% on Friday, its biggest one-day drop in over 11 weeks.

Ole S. Hansen, head of commodity strategy at Saxo Bank, attributed the sharp drop in gold to Warsh's 'hawkish' speech, which lifted expectations that the central bank could soon raise interest rates. ActivTrades senior analyst Ricardo Evangelista added that renewed U.S.-Iran tensions are also contributing to inflation concerns and increasing expectations of a Fed rate hike before the end of the year.

The price of silver is also down slightly on Monday after falling further late last week, with silver futures priced at about $66 per ounce. Analysts say this decline may be due in part to Warsh's comments and the increased likelihood of a rate hike.