Gold prices fell on Monday as bond rates rose, with the focus on January consumer price index data in the United States, which might influence the Federal Reserve’s rate-hike policy.
Spot gold recently fell 0.72% to $1,851.28 per ounce, while U.S. gold futures were down 0.72% to $1,851.26.
The dollar index fell 0.2% as 10-year Treasury rates rose to their highest level since early January earlier in the day.
Gold was “a touch lower moving into tomorrow morning’s (CPI) figure,” according to RJO Futures’ senior market analyst Bob Haberkorn.
All eyes are on the United States’ CPI data, which is coming at 8:30 a.m. EST on Tuesday and is estimated to have risen 0.4% in January. Following revisions to earlier statistics, consumer prices climbed in December rather than decreasing as originally projected.
According to Haberkron, inflation figures might be a bit lower than expected, if not lower, and a shortfall in expectations could lead to a gold buying opportunity.
Markets have elevated the prospect of further Fed tightening, with rates expected to peak at roughly 5.15% and decreases coming later and slower.
Fed Governor Michelle Bowman stated that the Fed will need to continue raising interest rates in order to bring inflation back down.
Rising US interest rates raise the potential cost of storing non-yielding bullion; hence, gold is very sensitive to them.
Spot silver lost 0.8% to $21.8159 per ounce, while platinum rose 1.09% to $954.8581.
After plunging to a near three-year low earlier in the day, palladium rebounded 0.91% to $1,556.2451.
“Given the downside risk to autocatalyst demand from potential recessions, the palladium price could continue lower,” said Heraeus analysts in a note.