Gold Slumps as Warsh Comments Spark Rate Hike Frenzy

Gold prices have dipped to near two-week lows as investors weigh renewed Middle East tensions and hawkish comments from Federal Reserve Chair Kevin Warsh.

The metal traded around $4,440 an ounce on Monday, its lowest level in about a fortnight, after Warsh's remarks fueled expectations for a September rate hike.

Bullion dropped more than 3% last Friday, its biggest one-day decline since June 10, following Warsh's warning that the Fed would 'have work to do' without clearer evidence of inflation returning to its 2% target.

The CME FedWatch Tool now prices in a nearly 60% chance of a September rate hike, up from about 36% before Warsh's comments.