Gold hits near two-week low on Fed chief's hawkish stance

Spot gold dropped 0.8% to $4,417.04 per ounce by 0406 GMT on Monday, reaching a level not seen since August 19, Business Recorder reported. Bullion had already shed over 3% on Friday. US gold futures were also lower, down 1.4% at $4,466.80.

Fed Chair Kevin Warsh set the tone at the Jackson Hole symposium on Friday, saying policymakers still have a job to finish if inflation does not clearly move toward the 2% target. His remarks went further than before in acknowledging that rate increases could be needed. Gold typically loses appeal when borrowing costs rise, because it pays no interest.

Escalating Middle East tensions and US military action in Iran pushed oil prices more than 2% higher, adding to inflation worries. Trump said on social media that Kharg Island, Iran's energy hub, was being destroyed after American forces hit rocket launchers on another island. Markets put a 60% chance on a Fed rate hike in September, according to CME FedWatch, while silver, platinum and palladium also declined, with silver at $66.10 an ounce. US labour market reports, including nonfarm payrolls, are due this week.