Market Summary - August 28, 2026
On August 28, 2026, gold prices retreated by 3% as the US dollar rebounded following a hawkish speech by Federal Reserve Chair Kevin Warsh at the Jackson Hole Economic Symposium. Warsh emphasized the Fed's commitment to combating inflation and restoring price stability, reaffirming the target inflation rate of 2%. This shift in focus led to a pullback in assets negatively correlated with the dollar, including gold, Bitcoin, and major equity indices.
Market Reactions
The Nasdaq 100 index fell over 0.6%, with Nvidia shares dropping nearly 3.5% as investors took profits after a significant rally. Marvell Technology also faced a decline of almost 10% following disappointing quarterly results. In contrast, the Dow Jones Industrial Average (DJIA) remained relatively flat, and the S&P 500 saw a minor decrease of around 0.2%, indicating a muted reaction in equities compared to the movements in metals and cryptocurrencies.
Economic Indicators
Warsh's speech highlighted the ongoing strength of the US economy, stable labor market, and increasing private-sector investment, particularly in the AI sector. However, he noted that inflation remains above target and that uncertainties regarding energy prices could necessitate further policy actions. Following his remarks, the probability of a 25-basis-point rate hike at the upcoming September meeting increased to 57.5%, up from 35.4% the previous day.
Cryptocurrency and Equity Performance
Bitcoin experienced a decline from approximately $79,500 to around $77,000, with major cryptocurrencies like Ethereum and Ripple also down by 4-5%. The Russell 2000 index, which is sensitive to Fed policy shifts, fell about 1.2%. In the US equity market, Gap Inc. shares surged over 12% after a positive earnings report, while BioNTech shares dropped around 7% after halting a Phase 2 clinical trial due to safety concerns.
European Markets and Commodities
European equity markets showed positive performance, with the CAC 40 and DAX indices gaining approximately 0.7-0.9%, while the UK's FTSE index also saw modest gains. In commodities, cocoa futures rose sharply by nearly 7%, while oil prices edged lower to around $88 per barrel.
Inflation Expectations
The final University of Michigan data for August indicated that inflation expectations in the US remain elevated but have slightly decreased. One-year inflation expectations fell to 4.0% from 4.4%, while five-year expectations remained steady at 3.3%. The consumer sentiment index rose to 51.9, slightly below forecasts, while the expectations index improved to 51.5.
Technical Analysis
Gold has lost upward momentum, falling decisively below the 200-period EMA for the first time in months, with selling volume dominating. The stronger US dollar has prompted profit-taking in gold and other metals. The EUR/USD pair has also retraced last week's gains, reaching its lowest level since August 19, near 1.158.