September 1, 2026
Gold and silver have entered a decisive correction phase following Fed Chairman Kevin Warsh’s surprisingly hawkish speech. Gold fell below the 4,500 mark and has now also dropped below 4,400 U.S. dollars per ounce, while silver is testing support in the 65 U.S. dollar range. According to experts, however, this monetary policy headwind by no means signals the end of the overarching uptrend.
Fed’s Macro Dilemma Supports Gold Despite Interest Rate Concerns
The trigger for the recent volatility was Warsh’s appearance at the central bank symposium in Jackson Hole. With his clear statement that inflation would be consistently pushed toward the 2 percent target, the probability priced into the market for a U.S. interest rate hike in September jumped abruptly to just under 57 percent. The strengthening U.S. dollar and rising real yields immediately put the non-interest-bearing precious metals under selling pressure.
Market observers, however, initially viewed the move as a healthy adjustment of interest rate expectations rather than a fundamental trend reversal. Gold remains caught between two forces: On the one hand, high interest rates weigh on prices in the short term. On the other hand, the U.S.—and the Fed in particular—faces a monetary policy dilemma: Higher borrowing costs to combat inflation exacerbate the already critical state of U.S. public finances. As long as geopolitical risks, high government debt, and fiscal uncertainties persist, demand for gold as a safe haven remains structurally unaffected.
Should Treasury yields stabilize at this level or ease again, investment demand is likely to quickly recover, the report stated.
Silver Faces Key Test at $66
While gold fluctuates between interest rate fears and a mountain of debt, silver is facing a clear technical test. After hitting a two-month high of over $70, a wave of profit-taking sent the price plunging toward the $66 and $65 marks.
If the bulls defend this support level and push silver back above $68 or $70, the pullback would be confirmed as a normal market correction within an intact rally. A sustained break below these levels—exacerbated by oil prices near $90 and tensions in the Middle East—could, however, trigger a deeper correction. For investors, the environment remains volatile until upcoming U.S. labor market and inflation data provide more clarity on the Federal Reserve’s policy path.
