Spot gold was 0.1% lower at $1,991.09/Oz after reaching its lowest since December 13 on Tuesday
Gold stayed near a two-month low on Wednesday (February 14), trading below the key $2,000 per ounce level, after a stronger-than-expected US inflation report dampened expectations for more than three quarter-point rate cuts from the US Fed.
Spot gold was 0.1% lower at $1,991.09/Oz, as at 0146 GMT, after reaching its lowest since December 13 on Tuesday. Bullion dropped around 1.4% on Tuesday in its biggest daily decline since December 4.
US gold futures dropped 0.2% to $2,003.60/Oz.
US consumer prices rose more than expected in January amid increases in the costs of shelter and healthcare.
Fed policymakers will probably wait until June before trimming interest rates, traders bet after the US CPI figures. Higher interest rates raise the opportunity cost of holding bullion.
The US dollar index stayed near a three-month high, while 10-year Treasury yields were near a two-and-half-month high.
Global stock market indexes declined on Tuesday, with all three major US stock indexes dropping more than 1% each.
Money markets have factored in around three quarter-point rate cuts in 2024, down from four cuts prior to the inflation data. This is in line with the Federal Reserve’s rate forecasts, or what is called the “dot plot” released back in December.
The first Fed rate cut is now anticipated to come in June, with a 75% probability.
Trading volume is expected to be thin with markets in China shut for the Chinese New Year holidays.
Investors will now focus on US retail sales figures due on Thursday and producer price index (PPI) data due on Friday. At least five Federal Reserve officials are due to speak this week.
