Gold Falls 1% as Warsh Stresses Inflation Over Labor Market Worries

Gold prices declined about 1% amid selling pressure after Federal Reserve Chair Kevin Warsh spoke. At the Jackson Hole symposium he stressed that bringing inflation to the 2% target matters more than any labor market slowdown. Warsh said the labor market stays generally solid with most people finding work, though recent graduates face concerns. Inflation figures worry him more, with the PCE index rising 3.7% over 12 months and 4.1% over six months. He insisted the Fed must see clear progress toward its goal. Analysts read the remarks as a signal of possible rate hikes ahead, pushing gold below $4,600 to $4,552 an ounce. Warsh also noted healthy consumer spending, while economist Jeffrey Roach suggested the central bank will keep policy tighter for longer.