Gold slips key $2,000 level for first time in two months

GOLD PRICES fell below the key $2,000 per ounce level to a two-month low on Tuesday, as a stronger-than-expected US inflation report tempered prospects of an early interest rate cut from the US Federal Reserve.

Spot gold was down 1.3% at $1,993.29 an ounce by 01:56 p.m. ET (1856 GMT), its lowest since Dec. 13.

US gold futures settled 1.3% lower to $2007.20.

Data showed US consumer prices increased more than expected in January amid an increase in the costs of shelter and healthcare.

Fed policy makers will probably wait until June before cutting interest rates, traders bet after the US CPI data. Higher interest rates increase the opportunity cost of holding bullion.

Following the inflation data, the dollar jumped 0.7% to a threemonth high against its rivals, making gold more expensive for holders of other currencies. The US 10-year Treasury yield also rose.

The CPI print triggered “largescale Commodity Trade Advisor liquidations in gold markets... but prices would need to revisit the $1,950 per ounce range to spark the next algorithmic selling program,” TD Securities wrote in a note.

Investors will now focus on retail sales data on Thursday and producer price index numbers on Friday. The market will also listen to comments from a slew of Fed officials this week.

Several US Fed officials, including Chairman Jerome Powell, said last week they want to see more evidence inflation will continue to decline before cutting rates.

Elsewhere, spot platinum was down 1.9% at $871.99 an ounce; palladium fell 4.1% to $855.59; and silver lost 2.8% at $22.05. —