Warsh's Jackson Hole Speech: Markets on High Alert for Rate Hike Signals

Federal Reserve member Kevin Warsh is set to take center stage at Jackson Hole on August 29, where markets are pricing in roughly one 25-basis-point rate hike by year-end.

Gold has surged +7.1% this week and is currently trading at $4,642.58, but Citi warns that it's vulnerable to a hawkish surprise from Warsh, which could lead to a sharp decline in the metal.

The Dollar Index (DX) is already flashing strong sell signals on both daily and weekly timeframes, with an RSI of 35.9 approaching oversold territory.

A dovish speech from Warsh would send the US 2-year yield lower, while a hawkish one could push it towards its 52-week high of 4.37%.