Gold prices fell to their lowest level in nearly two weeks on Monday after Federal Reserve Chair Kevin Warsh indicated that higher interest rates may be necessary to ease price pressures, while escalating tensions in the Middle East fueled inflation concerns.
اضافة اعلان
Spot gold fell 0.8% to $4,417.04 an ounce by 0406 GMT, its lowest level since Aug. 19. Prices had dropped more than 3% on Friday.
U.S. gold futures fell 1.4% to $4,466.80 an ounce.
“Gold is still licking its wounds following Warsh’s hawkish tone at Jackson Hole,” said Tim Waterer, chief market analyst at KCM Trade. “U.S. military action in Iran has put upward pressure on oil prices, adding to gold’s inflation-related headwinds.”
Although gold is widely viewed as a hedge against inflation, it typically becomes less attractive when interest rates are high because it does not generate income.
Speaking at the Jackson Hole economic symposium on Friday, Warsh said the Federal Reserve “has a lot of work to do” if policymakers fail to gain the confidence they need that inflation is moving toward the 2% target. His remarks came close to acknowledging that higher interest rates may be necessary.
Markets currently see a 60% probability of a U.S. rate hike in September, according to CME’s FedWatch tool.
U.S. President Donald Trump said on social media that Khark Island, a major Iranian energy hub, was being destroyed after U.S. forces targeted two missile launch platforms on another Iranian island in the first known U.S. strikes on Iran since late July. Oil prices subsequently rose more than 2%.
A series of U.S. labor market reports is due this week, including job openings, ADP employment data, weekly jobless claims and nonfarm payrolls.
“Nonfarm payrolls could either extend gold’s decline following the Jackson Hole meeting or provide a catalyst for a short-covering rebound,” Waterer said.
Among other precious metals, spot silver fell 0.4% to $66.10 an ounce, platinum declined 1.3% to $1,797.03, while palladium dropped 2.5% to $1,386.96.
Source: Reuters
