The dollar rose to the highest level in three months after the reading, adding pressure on gold.
Steady inflation weighs on bets on interest rate cuts in May and June, and the outlook for gold is cloudy
US inflation rose more than expected in January, consumer price index (CPI) inflation data showed on Tuesday, lending credence to recent warnings from the Federal Reserve that steady inflation will prevent the bank from cutting interest rates.
The CME Fedwatch tool showed that traders trimmed their bets on interest rate cuts in May and June, although traders still expect a 51% chance of a 25 basis point cut in June.
However, the possibility of higher interest rates for a longer period bodes poorly for gold, given that higher interest rates lead to higher opportunity costs of investing in the yellow metal and this trend has limited any significant gains in gold prices over the past two years.
The yellow metal has made limited progress beyond $2,050 in recent sessions, although it still gains about 10% in 2023.
2024-02-14 17:02:42
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