Gold erases Treasury-led gains as Fed Chair Warsh's hawkish tone lifts USD

Gold surrendered most of its Treasury-driven advance after Fed Chair Kevin Warsh delivered a hawkish address at the Jackson Hole Symposium, stating he 'would be hard pressed to describe broad financial conditions as restrictive.' The remark effectively retightened financial conditions, pushing real yields higher and trimming market expectations for near-term rate cuts — a bearish combination for non-yielding bullion and a supportive one for the US dollar. XAU/USD reversed from session highs, with the metal now consolidating below its recent peak. The repricing has knock-on effects across FX: a firmer dollar pressures EUR/USD and GBP/USD, while USD/JPY finds support from the widening yield gap. AUD/USD, historically correlated with gold, remains vulnerable. Technically, gold faces resistance at the prior swing high, with initial support at the 21-day moving average and stronger demand expected near the prior breakout zone; a sustained close below would open a deeper corrective leg. Traders should monitor upcoming US inflation and payrolls data, which will determine whether Warsh's hawkish framing is validated or faded.