Gold prices slipped from near record-high levels on Tuesday, as traders braced for key US inflation report that could give more clarity on when the Federal Reserve might start cutting its interest rates.
Spot gold fell 0.2 percent to $2,178.53 per ounce, after rising for nine consecutive sessions. Bullion hit a record peak of $2,194.99 on Friday.
US gold futures also dipped 0.2 percent to $2,185.00.
“Following the stellar run-up in gold prices, it does call for some near-term breather,” IG market strategist Yeap Jun Rong said.
“Progress in US inflation has somewhat stalled in the January’s read, but follow-up comments from policymakers seem to suggest that they are willing to look beyond it as a one-off. Another surprise run of hotter-than-expected inflation data for February will likely challenge that, which could drive some near-term unwinding in gold prices.”
The US consumer price index (CPI) report for February, due at 1230 GMT, is likely to rise 0.4 percent for the month and keep the annual pace steady at 3.1 percent .
Traders are pricing in three to four quarter-point (25 bps) US rate cuts, with a 70 percent chance for the first in June, as per LSEG’s interest rate probability app. Lower rates boost the appeal of non-yielding bullion.