Gold Slips Near Two-Week Low as Fed Rate-Hike Bets Rise
Spot gold fell to $4,433.19 per ounce as investors increased expectations for a September Federal Reserve rate hike following Chair Kevin Warsh's inflation warning, while rising oil prices added to concerns over renewed price pressures.
By Paul Ploumis
Published September 1, 2026
Key Points
- Spot gold fell 0.4% to $4,433.19 per ounce after touching its lowest level since August 19.
- December U.S. gold futures settled 1.1% lower at $4,481.50.
- Gold still gained 9.7% for August, its strongest monthly performance since January.
- Traders raised the probability of a September Federal Reserve rate hike to about 64% from roughly 36% before Kevin Warsh's Jackson Hole remarks.
- Silver, platinum and palladium also declined, although all three remained on track for strong monthly gains.
MONTREAL (Scrap Monster): Gold fell on Monday, hovering near a two-week low as investors assessed growing expectations of a Federal Reserve rate hike following hawkish comments from Chair Kevin Warsh, while a surge in oil prices added to inflation concerns.
Fed Rate-Hike Bets Pressure Gold
Spot gold fell 0.4% to $4,433.19 per ounce by 01:39 p.m. EDT (1739 GMT), having touched its lowest level since August 19 earlier in the session.
Despite Monday's decline, gold remained set for its strongest monthly performance since January, with prices up 9.7% for August.
U.S. gold futures for December delivery dropped 1.1% to settle at $4,481.50.
'The biggest reason right now is higher interest rates, higher inflation expectations, driven by energies and drawdown of oil inventories,' said Daniel Pavilonis, senior market strategist at Stone X.
'And then the U.S. yields are continuing to strengthen, the dollar is continuing to strengthen. I think that puts gold in a precarious position,' he added.
Oil Surge Adds to Inflation Concerns
Crude prices rose more than 2% on Monday after the United States struck an Iranian island in the Strait of Hormuz and Tehran said it had responded, escalating a conflict that has now entered its sixth month.
The U.S. dollar remained near a roughly two-week high, although a slight pullback in the currency helped limit further declines in gold.
Warsh's Inflation Warning Lifts September Hike Odds
Gold tumbled more than 3% on Friday, marking its sharpest daily decline since June 10, after Warsh signaled at the Jackson Hole symposium that policymakers may need to do more if inflation does not move back toward the Federal Reserve's 2% target.
In his August 28 Jackson Hole address, Warsh said the Fed's preferred 12-month Personal Consumption Expenditures inflation measure stood at 3.7%, while the six-month change was 4.1%. He also described the U.S. labor market as stable, with unemployment at 4.1%, but said inflation remained the more concerning side of the Fed's dual mandate.
Warsh said the central bank must be confident that underlying inflation is moving toward its 2% objective 'clearly and at sufficient speed,' while noting that broad financial conditions did not appear restrictive.
Traders raised bets on a September rate hike to about 64%, from approximately 36% before Warsh's comments, according to the CME FedWatch Tool.
The Federal Open Market Committee is scheduled to meet September 15–16, putting upcoming economic releases under increased scrutiny ahead of the next monetary-policy decision.
Markets now await the U.S. ADP employment report and nonfarm payrolls data due later this week for additional signals on the economy and interest-rate outlook.
Silver, Platinum and Palladium Also Retreat
Spot silver fell 0.2% to $66.24 per ounce but was up about 15% for the month after reaching its highest level since mid-June on Friday.
Platinum slipped 2% to $1,783.55, while remaining on track for its biggest monthly gain since February.
Palladium fell more than 4.3% to $1,360.83, although it remained headed for its strongest monthly increase since December.
Courtesy: www.reuters.com