Gold Sinks $147 on Fed's Inflation Focus

Gold prices plummeted by over $147 an ounce on August 29 after Federal Reserve Chair Kevin Warsh emphasized that bringing inflation back to target remains the central bank's top priority.

In a speech at the annual Jackson Hole symposium, Warsh stated that the U.S. labor market is broadly consistent with full employment, but that stubborn price pressures pose a more serious concern.

The Fed's preferred gauge, the Personal Consumption Expenditures price index, rose 3.7% over the 12 months through July, and an annualized pace of 4.1% over the most recent six months, more than double the central bank's 2% objective.

This hawkish tone has boosted rate-hike expectations, with odds of a rate increase at the September FOMC meeting jumping from roughly 36% to nearly 60%, according to CME FedWatch data.