Gold prices recede from peak levels in anticipation of key U.S. inflation data

Shafaq News/ Gold prices retreated from their near-record highs on Tuesday, with the market poised for the pivotal U.S. inflation report that may shed light on the Federal Reserve's timeline for interest rate reductions.

As of 0424 GMT, spot gold decreased by 0.2% to $2,178.53 per ounce, following a nine-session rally. The precious metal had reached an all-time high of $2,194.99 last Friday. Similarly, U.S. gold futures saw a 0.2% decline to $2,185.00.

IG market strategist Yeap Jun Rong commented on the recent surge in gold prices, suggesting a pause might be due. "The January inflation figures showed a plateau, but officials appear ready to dismiss this as an anomaly. Should the February inflation data exceed expectations, it could prompt a reassessment, potentially leading to a pullback in gold prices."

The upcoming U.S. consumer price index (CPI) for February is anticipated to show a 0.4% monthly increase, maintaining the yearly rate at 3.1%. Market participants are factoring in the possibility of three to four 25 basis point rate cuts by the U.S., with a 70% likelihood of the initial cut occurring in June. Such rate cuts would enhance the attractiveness of non-interest-bearing gold.

Later today, the U.S. Treasury plans to auction $39 billion in 10-year notes. While this event is secondary to the overall interest rate landscape, KCM Trade's chief market analyst Tim Waterer noted that weak bond demand could lead to higher yields, which would diminish gold's allure.

The dollar remained relatively stable. In other precious metals, as spot platinum dropped 0.3% to $930.00 per ounce, palladium declined slightly by 0.1% to $1,029.38, and silver saw a marginal gain of 0.1% to $24.45 per ounce.

Source: (Reuters)