Gold prices nudge down ahead of US inflation data

Gold prices experienced a slight decline from levels close to an all-time high on Tuesday as market participants prepared for a crucial US inflation report that could provide further insight into when the Federal Reserve may begin to reduce its interest rates, according to Reuters.

Following a nine-day rally to a record high of $2,194.99, gold prices and US futures both take a modest 0.2 per cent step back, with futures settling at $2,185.00.

Market strategist Yeap Jun Rong commented on the need for a “near-term breather” after the significant rise in gold prices.

The market’s attention is now focused on the upcoming US consumer price index (CPI) report for February, which is expected to show a 0.4 per cent monthly increase, maintaining the annual inflation rate at 3.1 per cent.

Market speculation on three to four Federal Reserve rate cuts this year, with a 70 per cent chance of the initial cut in June, heightens gold’s appeal as a non-interest yielding investment.

In addition to the CPI report, the US Treasury is slated to auction $39 billion in 10-year notes later in the day. While the auction’s outcome is considered secondary to the inflation data, a lack of demand could lead to higher yields, potentially diminishing gold’s allure.

As the market awaits these developments, the dollar holds steady, while platinum, palladium, and silver record minor adjustments, with platinum falling 0.3 per cent to $930.00, palladium dipping 0.1 per cent to $1,029.38, and silver inching up 0.1 per cent to $24.45 per ounce.