Gold Crashes Below $4,300 — Is the Fed About to Change the Game?

Spot gold fell below $4,300/oz, extending its recent decline as markets reassessed the Fed’s interest-rate outlook.

Fed Chair Kevin Warsh’s hawkish comments at Jackson Hole pushed expectations for a September rate hike sharply higher, while rising Treasury yields and a stronger dollar added further pressure on gold. Markets are now pricing in a roughly two-thirds chance of a September hike.

Higher rates increase the opportunity cost of holding non-yielding gold, making the dollar and U.S. Treasury yields key drivers for the metal in the near term.

However, the longer-term picture remains supportive. Gold ETF inflows have recovered, while central banks continue to diversify reserves away from the dollar. China’s central bank has also remained an active gold buyer.

For traders, the key question is whether the current sell-off is a short-term correction or the start of a deeper trend reversal.

If yields and the dollar continue rising, gold could face further downside. But renewed ETF demand, central-bank buying or softer U.S. economic data could provide fresh support.

Near term, Fed expectations are driving gold. Longer term, central-bank demand remains a key bullish factor.