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Gold prices remain at session lows as markets digest hawkish comments from Fed Chair Jerome Powell

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(Kitco News) -Hawkish comments from Federal Reserve Chair Jerome Powell regarding U.S. monetary policy are weighing on gold prices as the market remains in negative territory.

Speaking at the Cato Institute's 40 annual monetary policy conference, Powell said that the Federal Reserve will continue to raise interest rates until it can get inflation back under control.

"We need to keep at it until we get the job done," he said. "We need to act now forthrightly and strongly, as we have been doing."

According to some economists, Powell's comments reiterated his stance presented at the Jackson Hole central bank symposium, where he warned that not only will interest rates have to move higher, but they could remain elevated for longer to make sure inflation remains well anchored.

In his comments during the Cato conference, Powell said that history cautions against prematurely loosening.

"It is very important that inflation expectations remain anchored," Powell said. "The longer that inflation remains well above target, the greater the concern that the public will start to just naturally incorporate higher inflation into its economic decision making. Our job is to make sure that doesn't happen."

The gold market fell to session lows as Powell started speaking and has struggled to find any bullish traction as bond yields have pushed higher. December gold futures last traded at $1,718.90 an ounce, down 0.53% on the day.

Powell's latest comments have helped to solidify market expectations for the central bank to raise interest rates by 75 basis points later this month. According to the CME FedWatch Tool, markets see an 86% chance of an aggressive move, up from 77% see Wednesday.

Commenting on the inner workings of the central bank's inner workings, Powell said that even as interest rates slow the economy to cool inflation, he expects the Federal Reserve can achieve its goals of price stability and maximum employment. He said that he doesn't see any reason to move to a single mandate.

"Our current mandate is approriate. I would not want to see the current mandate narrowed or broadened," he said. "The dual mandate has surved the public well."

Powell also provided some insights regarding the growing cryptocurrency market. He reiterated his stance that digital currencies are speculative and not a store of value. He added that the growing market needs regulations.

"Something that purports to be money ought to be regulated," he said.

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