Gold prices declined slightly on Tuesday after reaching near record-high levels. Traders were preparing for the release of a key U.S. inflation report, which could provide more information about when the Federal Reserve might reduce interest rates. As of 04:24 GMT, spot gold dropped 0.2 percent to $2,178.53 per ounce, following a nine-day consecutive increase. On Friday, it reached a record peak of $2,194.99. U.S. gold futures also decreased by 0.2 percent to $2,185.00.
In Saudi Arabia, the price of 24-karat gold recorded on Tuesday SAR3,068.
Furthermore, the 10 grams of 24-k gold is being sold for SAR2,633 in the Kingdom. Meanwhile, the per ounce gold price stands at SAR8,190.
Read more: Gold rally takes a pause as traders await U.S. inflation data
According to IG market Strategist Yeap Jun Rong, there is a need for a temporary pause in gold prices after their significant increase. He mentioned that while there was a slowdown in U.S. inflation in January, policymakers’ subsequent statements indicate their willingness to view it as an isolated occurrence. However, if there is another unexpected surge in inflation data for February, it could potentially challenge this perspective and lead to a temporary decrease in gold prices.
Market anticipation for February’s CPI data
The U.S. consumer price index (CPI) report for February, scheduled for release at 1230 GMT, is expected to show a 0.4 percent increase for the month, maintaining an annual pace of 3.1 percent. Traders are factoring in the possibility of three to four quarter-point (25 bps) rate cuts by the United States, with a 70 percent probability of the first cut occurring in June, according to LSEG’s interest rate probability app. Lower interest rates make non-yielding bullion more attractive. Additionally, the U.S. Treasury plans to sell $39 billion worth of 10-year notes later in the day.
The bond auction is considered less significant in terms of the broader interest rate outlook. The primary focus remains on the consumer and producer price figures for the week. However, if demand for bonds is low, it could lead to higher yields, thereby reducing the appeal of gold. Tim Waterer, chief market analyst at KCM Trade, stated that the dollar remained relatively stable. Spot platinum decreased by 0.3 percent to $930.00 per ounce, palladium dipped 0.1 percent to $1,029.38, while silver increased by 0.1 percent to $24.45.
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