Gold drops 3% as Fed's Warsh comments lift rate hike bets
GLD•Other precious metals
Spot silver XAG= fell 3.5% to $66.81 per ounce, platinum XPT= was down 0.6% at $1,835.07, while palladium XPD= gained 5.3% to $1,422.25 an ounce.
Gold falls as rate-hike bets rise
Aug. 28 (Reuters) - Gold prices reversed course and fell over 3% on Friday, as traders increased bets on an interest rate hike after Federal Reserve Chairman Kevin Warsh's remarks on curbing inflationary pressure.
Spot gold XAU= was down 2.9% at $4,567.23 per ounce by 01:44 p.m. EDT (1744 GMT), its lowest level since August 20. U.S. gold futures GCv1 for December delivery settled 2.9% lower at $4,529.9.
Bullion has fallen 2.9% this week after Friday's decline, pulling back from the more than three-month high of $4,696.18 reached on Tuesday.
Warsh comments boost dollar and pressure bullion
"Gold is getting slapped hard as Chair 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," independent analyst Tai Wong said.
Traders added to bets on a September rate hike after Warsh said the Fed will "have work to do" if policymakers are not confident that underlying inflation is returning to its 2% target, marking the closest he has come to acknowledging interest rate hikes may be needed to ease price pressures.
Traders now see a 58% chance of a U.S. rate hike in September, compared with 36% before Warsh's comments, and an 89% chance of a December increase, according to the CME FedWatch tool.
