Gold Prices Drop as Warsh Stays Fixated on Inflation Despite Fed Rate Hike

The gold market initially withstood the Fed's expected 25 basis point rate hike to the 3.75-4.00% range. Updated projections pointed to at least one more increase by year-end at 4.1%. Prices held above $4,300 an ounce until Chair Kevin Warsh delivered hawkish remarks at the press conference. Warsh stressed the push to the 2% inflation target, saying summer readings show no real improvement in trends. Spot gold fell to $4,256.50 per ounce, down nearly 1%. He reaffirmed the Fed's focus on price stability amid resilient growth and downplayed rising bond yields linked to 2026 expansion, tech spending, and global geopolitics. Analyst Chris Zaccarelli noted that persistent inflation and spending have limited the Fed's room to maneuver, even as Warsh avoided firm signals on future meetings.