Gold drops over 1% as Fed's Warsh comments lift rate hike bets
GLD•Other precious metals rise
Gold discounts in India plunged this week, as demand fell sharply on market speculation that the government could consider rolling back a recent hike in import duties. GOL/AS
Spot silver XAG= rose 0.3% to $69.48 per ounce, platinum XPT= was up 1.7% at $1,878.46 and palladium XPD= gained 7% to $1,444.75 an ounce.
Gold falls as rate-hike bets rise
Gold prices reversed course and fell over 1% 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 0.8% at $4,563.05 per ounce by 1452 GMT, after earlier hitting a one-week low of $4,528.94. U.S. gold futures for December delivery fell 1% to $4,615.10.
Warsh remarks drive higher September hike odds
"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 56% chance of a U.S. rate hike in September, compared to 36% before Warsh's comments, and an 80% chance of a December increase, according to the CME FedWatch tool.
