Gold Prices Under Pressure as Market Awaits Fed's Next Move

Gold prices have been under pressure in recent trading sessions, particularly after the market absorbed tough signals about US monetary policy. As of August 31, spot gold price decreased by 0.39% to $4,437.50 per ounce, while December gold futures price fell by 0.91% to $4,488.74 per ounce.

The sharp decline in gold prices follows a statement from Fed Chairman Kevin Warsh, who emphasized that the US central bank cannot be subjective about inflation. This message was quickly interpreted as a signal for potential interest rate hikes in September, which would make gold less attractive due to its lack of income-generating potential.

However, independent analyst Tai Wong notes that the possibility of an interest rate hike is still uncertain and may not necessarily lead to higher interest rates. Wong believes that more data is needed to determine whether US inflation is returning to the 2% target set by the Fed.