4 days ago
Gold Prices Fall After Warsh Signals Possible Rate Hikes
Gold prices went down after Kevin Warsh warned that inflation in the United States was still too high.
He suggested that the Federal Reserve might raise interest rates if inflation does not slow enough.
Higher interest rates can make gold less attractive to some investors.
Spot gold fell to $4,563.05 per ounce during trading.
In India, gold fell to ₹1,56,780 per 10 grams.
New US employment figures also showed a small downward revision.
Warsh said the labor market generally remained consistent with full employment.
Investors are now watching for clues about what the Federal Reserve may do at its September meeting.
Gold prices fell more than 1% on Friday, 28 August, after Federal Reserve Chair Kevin Warsh warned that inflation remained too high.
Spot gold was down 0.8% at $4,563.05 per ounce by 1452 GMT, according to Reuters.
In India, gold traded at ₹1,56,780 per 10 grams, down ₹2,830, or 1.770%.
Warsh said the Federal Reserve might need to act unless underlying inflation moves toward its 2% goal quickly enough.
A US employment-data revision showing March 2026 nonfarm payrolls down 79,000 also weighed on gold prices.
- Who
- Federal Reserve Chair Kevin Warsh, gold investors, and US economic officials.
- What
- Gold prices fell after Warsh signaled that the Federal Reserve could raise interest rates to address elevated inflation.
- Where
- Warsh spoke at the annual Jackson Hole Symposium in Wyoming; gold was also trading in India and international markets.
- When
- Friday, 28 August; the cited US employment revision covered March 2026.
- Why
- Warsh said US inflation remained above the Federal Reserve’s 2% objective, while revised employment data also affected market sentiment.
Rate-Hike Concern
Economic-Data Interpretation
Inflation and monetary policy
Rate-Hike Concern
Warsh said inflation remained too high and that the Federal Reserve had more work to do unless underlying inflation moved toward its objective at a sufficient speed.
Economic-Data Interpretation
Investors and analysts were seeking clarity on Warsh’s approach, while analyst Tai Wong said the speech could make the September meeting’s outcome appear evenly balanced.
Labor-market condition
Rate-Hike Concern
Warsh said the price-stability side of the Federal Reserve’s mandate was more concerning than the slowing labor market.
Economic-Data Interpretation
Warsh also said people who wanted to work were generally holding or finding jobs and that labor markets were consistent with full employment; revised payroll data showed a small decline in the benchmark.
Key facts
- Indian gold price
- ₹1,56,780 per 10 grams
- Indian price change
- Down ₹2,830, or 1.770%
- Spot gold price
- $4,563.05 per ounce by 1452 GMT
- Recent gold high
- $4,696.18 per ounce on Tuesday, 25 August
- Fed inflation reference
- The 12-month PCE inflation change was reported at 3.7%, while the six-month change was 4.1%.
- Employment revision
- The March 2026 national nonfarm payroll benchmark was revised down 0.1%, or 79,000 jobs.
Quotes
Kevin Warsh
United States Federal Reserve Chair speaking about inflation and the central bank's policy mandate.
“Gold is getting slapped hard as Warsh affirms that inflation isn't meaningfully slowing and the Fed has ‘work to do’. While it may once again be ‘speak loudly and carry a short stick’ this will make the market price the September meeting as a coin flip”
livemint.com
“We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do.”
livemint.com
Sources
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