01.09.2026 12:40
Fed Chairman Kevin Warsh's hawkish statements, expectations of a rate hike for September, and the escalating Strait of Hormuz crisis in the Middle East sharply drove down gold prices. In markets where gold fell to $4,437 per ounce, investors' attention has turned to the critical US employment data to be released this week.
Gold prices are under severe pressure due to hawkish messages from Fed Chairman Kevin Warsh and escalating tensions in the Strait of Hormuz in the Middle East. The precious metal, which has fallen to the $4,437 level, has investors' focus turning to the US employment data due this week.
Gold, which tested its highest levels in the last 3 months last week, continues its sharp selling wave that began after hawkish statements by US Federal Reserve (Fed) Chairman Kevin Warsh at the Jackson Hole meeting. On the second trading day of the week, spot gold fell 0.3% to $4,437.10 per ounce, while US gold futures were trading 0.1% higher at $4,485.30.
WARSH'S HAWKISH MESSAGE AND INTEREST RATE HIKE EXPECTATION
Fed Chairman Warsh's emphasis that the Fed has "work to do" until inflation reaches its 2% target had a cold shower effect on markets. According to CME FedWatch data, markets have begun pricing in a 66% chance of a rate hike in September and an 89% chance in December. Rising rate expectations reduced the appeal of gold, which offers no interest yield, pulling prices down. US President Donald Trump also supported Warsh, saying he expects him to "do what needs to be done."
STRAIT OF HORMUZ AND OIL PRESSURE
Another significant pressure factor on gold was the renewed military escalation in the Middle East. The risk of conflict between the US and Iran and concerns over the Strait of Hormuz pushing oil prices higher have re-triggered inflation expectations.
IG analyst Tony Sycamore noted that both Warsh's interest rate messages and the Hormuz crisis are squeezing gold at the same time; he pointed out that more than one additional rate hike could pose a more serious risk for gold.
EYES ON US EMPLOYMENT DATA
The critical week that will determine the fate of markets has begun. Investors are focused on JOLTS job openings, US private sector employment, and the non-farm payroll data due on Friday. The upcoming data will provide clear signals about the Fed's rate path.
Current Status of Other Precious Metals:
- Spot Silver: Up 0.3% at $66.34
- Platinum: Up 0.1% at $1,793.03
- Palladium: $1,356.75 (Flat)
CRITICAL FORECAST FROM A MAJOR BANK
On the other hand, despite the short-term pullback in prices, US-based multinational investment bank Goldman Sachs Research has published a striking gold report regarding the end of 2026. The major bank announced it expects the price of gold to rise to $4,900 per ounce by the end of 2026. The institution cited strong ongoing gold purchases by central banks to diversify their foreign exchange reserves and markets reducing expectations of rate hikes from the Fed in 2026 as the main reasons for the rise. It was also stated that investors using gold derivatives to protect their portfolios against large-scale changes in government policies is increasing volatility in the market.