By Seher Dareen
(Reuters) – Gold prices slipped on Monday due to upticks in the dollar and bond yields, with the spotlight on U.S. January consumer price index data that could steer the Federal Reserve’s rate-hike strategy.
Spot gold fell 0.4% to $1,857.50 per ounce by 9:25 a.m. ET (1425 GMT), while U.S. gold futures were down the same amount to $1,866.90.
The dollar index was steady, making dollar-priced bullion more expensive for overseas buyers. Benchmark 10-year Treasury yields hit their highest level since early January. [US/] [USD/[]
A stronger dollar is weighing on gold, with the metal “a little lower just based off that heading into tomorrow morning’s (CPI) number,” said Bob Haberkorn, senior market strategist at RJO Futures.
All eyes are on U.S. CPI data due at 8:30 a.m. EST on Tuesday, expected to have climbed 0.4% in January. Revisions to the previous data showed consumer prices rose in December instead of falling as previously estimated.
Fed Governor Michelle Bowman said the Fed will need to continue to raise interest rates in order to get them to a level high enough to bring inflation back down.
Gold is highly sensitive to rising U.S. interest rates, as they increase the opportunity cost of holding non-yielding bullion.
Markets have raised the profile for future tightening by the Fed, with rates seen peaking at around 5.15% and with cuts coming later and slower.
Elsewhere, spot silver was down 0.4% to $21.90 per ounce, while platinum fell 0.6% to $938.46.
Palladium gained 0.7% to $1,553.92, after falling to a near three-year low earlier in the session.
“Given the downside risk to autocatalyst demand from potential recessions, the palladium price could continue lower,” said Heraeus analysts in a note.
(Reporting by Seher Dareen in Bengaluru; Editing by David Holmes)
