Gold prices slipped from record-high levels on Wednesday as the U.S. dollar and Treasury yields firmed after a stronger-than-expected inflation print softened expectations of an early U.S. rate cut.
Spot gold fell 0.7% to $2,336.40 per ounce, as of 12:30 p.m. ET (1630 GMT). U.S. gold futures lost 0.3% to $2,355.00.
The U.S. dollar index rose 1.1% and U.S. Treasury yields spiked after the data, making non-yielding bullion less attractive.
A Labor Department report showed the Consumer Price Index(CPI) rose 0.4% on a monthly basis in March, compared with the 0.3% increase expected by economists polled by Reuters.
Gold prices stumbled with the stronger-than-expected CPI data contributing to expectations of later and fewer cuts by the Fed, said Tai Wong, a New York-based independent metals trader.
The retreat in gold prices following the release of the US inflation data highlights the complex interplay between economic indicators and market sentiment. While gold is traditionally seen as a safe-haven asset during times of economic uncertainty, its price movements are also influenced by factors such as interest rates, currency fluctuations, and geopolitical tensions. As investors digest the implications of the latest inflation figures, they are likely to reassess their strategies and adjust their positions accordingly.
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