Gold surges after Warsh tempers rate hike fears at Sintra

Gold prices staged a sharp reversal on Wednesday, climbing more than 2% after Federal Reserve Chair Kevin Warsh said inflation expectations and risks have declined, and a softer-than-expected private payrolls report undercut the case for near-term rate hikes. The rebound came after the precious metal had slipped below $4,000 an ounce earlier in the session, a level not seen since November 2025.mediacenter.adp+1

Warsh Calms Market Nerves

Speaking at the European Central Bank's annual forum in Sintra, Portugal — his first appearance on the global stage as Fed chairman — Warsh told the audience that inflation expectations "have come down" in recent weeks, while reaffirming the central bank's commitment to reaching its 2% target. The remarks surprised markets that had been bracing for a more hawkish tone after the Fed's June meeting, where nine of 18 policymakers signaled support for at least one rate hike this year. Warsh declined to offer explicit guidance on the Fed's next move, saying the committee would decide when policymakers "shut the door" at their upcoming meeting, but his measured language was enough to ease pressure on bullion.reuters+4

Soft Jobs Data Adds Fuel

Adding to gold's rally was the June ADP Automatic Data Processing, Inc. ↗ 2.77% National Employment Report, released Wednesday morning. Private-sector payrolls came in well below the consensus forecast, reinforcing signs that the labor market is cooling after a period of resilience. Gold futures had opened the session at $4,025, already down 0.3% from Tuesday's close, before the combination of the jobs miss and Warsh's comments sent prices sharply higher.prnewswire+2

A Brutal Quarter in the Rearview

The bounce offered a reprieve from what has been a punishing stretch for gold investors. The metal lost roughly 15% in the second quarter — its worst three-month performance since Q2 2013, according to Reuters ↗ 5.06% — as the U.S.-Iran conflict drove energy prices higher and stoked fears of additional Fed tightening. A stronger dollar and rising Treasury yields compounded the selling, with spot gold falling as much as 29% from its January record above $5,500 an ounce. Analysts at UBS ↗ 2.65% argued last week that the selloff was overdone, projecting prices could reach $5,200 over the next 12 months on the back of eventual rate cuts, dollar weakness, and continued central bank buying. Wednesday's price action offered early evidence that sentiment may be starting to shift, though some market watchers cautioned that the recovery could prove short-lived unless the broader rate outlook changes materially.businessinsider+6