BlockBeats News, August 29th - After Federal Reserve Chair Powell's remarks on addressing inflationary pressures, the market significantly increased its bets on a Fed rate hike. Consequently, the US dollar strengthened, putting pressure on precious metals such as gold, leading to a sharp decline in prices. At the time of writing, spot gold has plunged by 2.6% intraday, dropping over $120 to $4480 per ounce, hitting a one-week low of $4464 per ounce during the session.

Independent analyst Tai Wong pointed out, "Chair Powell clearly stated that inflation has not shown a substantial slowdown and emphasized that the Fed 'still has work to do.' This stance triggered a severe sell-off in the gold market. Although this may still be a 'barking dog seldom bites' communication strategy, it was enough to make the market perceive the September meeting as a deadlock situation with equal probabilities of a rate hike and a pause." Powell's remarks this time are his most explicit acknowledgment so far that further rate hikes may be needed to alleviate price pressures. In his speech, he noted that if policymakers cannot be confident that underlying inflation is steadily returning to the 2% target level, the Fed "still has work to do."

As a result, traders quickly increased their bets on a rate hike in September. As for other precious metals, spot silver fell by 3.63% to $66.77 per ounce intraday, spot platinum reversed its earlier gains to a decline of 0.27% to $1841.9, and spot palladium saw its gains narrow to 5.05%, reaching $1418.3.