Gold Prices Tumble Amid Hawkish Fed Remarks and Higher US Inflation
Gold prices plummeted nearly 2% on Friday as markets responded to higher-than-expected US inflation data and a hawkish speech by Federal Reserve Chair Kevin Warsh at the Jackson Hole symposium.
The MCX gold futures for October delivery declined 1.63%, while September silver futures fell 1.66%. The price of gold stood at Rs 1,56,400 per kg, and silver was priced at Rs 2,36,651 per kg on Friday.
Analysts noted that the reversal came after a strong surge in bullion prices earlier in the week, which had been driven by concerns over currency debasement and US Treasury support for long-dated bonds. However, stronger economic data prompted markets to price in a greater possibility of the Federal Reserve keeping monetary policy restrictive for longer.
Warsh's hawkish remarks further reset interest-rate expectations, causing gold prices to plummet by roughly $70 within minutes of his speech before recovering some ground.