Sharp Drop in Gold Prices Following Fed Chair Kevin Warsh's Remarks
Gold and silver prices declined following inflation and interest rate messages from Fed Chair Kevin Warsh.
Sell-offs in precious metals accelerated following statements by Fed Chair Kevin Warsh regarding inflation and interest rate policies. Spot gold dropped by over 3% to $4,454, while gram gold fell to 6,908 liras.
Sharp Sell-Offs in Precious Metals
Gold and silver prices, which had been on an upward trend throughout August, rapidly lost value following messages from US Federal Reserve Chairman Kevin Warsh.
While spot gold fell by up to 3.2% during the day to the $4,454 level, the price of silver per ounce also dropped to $66.3.
Jackson Hole Symposium Messages
Speaking at the Jackson Hole Economic Policy Symposium, Fed Chair Kevin Warsh stated that no permanent improvement has been observed in the underlying trend of inflation.
Warsh signaled that if inflation does not decline to the targeted level, new and tightening steps could be taken in monetary policy.
Interest Rate Hike Expectations Strengthened
Warsh's statements significantly increased the probability in the markets that an interest rate hike could be made in September.
According to CME FedWatch data, the probability of the Fed going for a 25 basis point interest rate hike rose above 57%.
Bonds and Dollar on the Rise
The US 2-year Treasury yield increased by approximately 12.8 basis points to 4.36%.
The US dollar gaining about 1% on a weekly basis was among the factors that accelerated the sell-off wave in gold.
Current Prices in the Domestic Market
Following these global developments, the selling price of gram gold in the domestic market recorded a 3.01% decrease.
While gram gold traded at 6,908.74 liras, quarter gold found buyers at the 11,269 lira level.