Fed Chair Powell’s hawkish remarks boost rate hike expectations, gold falls over $120

According to ME News, on August 29 (UTC+8), following remarks by Federal Reserve Chair Powell on curbing inflationary pressures, market expectations for a Fed rate hike surged, strengthening the U.S. dollar and pressuring precious metals prices lower. As of publication, spot gold fell 2.6% intraday, dropping over $120 to $4,480 per ounce, and touched a one-week low of $4,464 during trading. Independent analyst Tai Wong noted: “Chair Powell clearly stated that inflation has not shown meaningful easing and emphasized that the Fed ‘has more work to do,’ triggering a sharp sell-off in the gold market. Although this may still be a ‘loud thunder, light rain’ communication strategy, it is sufficient to position the September meeting as a closely contested scenario with equal odds of a rate hike versus a pause.” Powell’s comments represent his most explicit indication to date that further rate increases may be necessary to ease price pressures. He stated that if policymakers cannot be confident that underlying inflation is steadily returning to the 2% target, the Fed “has more work to do.” In response, traders rapidly increased bets on a September rate hike. Among other precious metals, spot silver declined 3.63% to $66.77 per ounce; spot platinum turned negative for the day, falling 0.27% to $1,841.90; and spot palladium’s gains narrowed to 5.05%, trading at $1,418.30. (Source: BlockBeats)