Gold Slips 3% as Fed’s Warsh Warns Inflation Still Too High

Federal Reserve official Kevin Warsh sent gold prices tumbling more than 3% on Friday after he warned that inflation remains stubbornly high and hinted at possible monetary policy action. Speaking at the annual Jackson Hole economic symposium, Warsh said the central bank may need to step in again to cool price pressures. His remarks rattled investors, who had hoped the Fed would ease its aggressive rate-hiking campaign. Gold, often seen as a hedge against inflation, typically falls when interest rates rise because higher rates make non-yielding bullion less attractive. The metal’s sharp drop reflects growing expectations that the Fed will keep borrowing costs elevated for longer. Warsh did not specify a timeline or the size of any potential move, but his tone signaled that the fight against inflation is far from over. Markets now await further clues from other Fed speakers scheduled later in the conference. Analysts say the next few days will be critical for gold’s short-term direction, as traders adjust to the possibility of tighter policy ahead.