Gold prices eased slightly on Thursday as the yield on the benchmark 10-year US Treasuries offset some losses, but the precious metal remained close to a one-week high touched the day before as the dollar continued its slide.
At 10:20 GMT, spot gold was down 0.1% at $1,823.24 an ounce. US gold futures fell 0.3% to $1,822.20.
In the previous session, bullion rose to $1,827.92, the highest level since Jan. 5.
“Gold’s performance is somewhat disappointing, given the somewhat seismic collapse of the US dollar, gold could have performed as one would expect, but it did not reach $1,835 an ounce, given the inflation data”said Ross Norman, an independent analyst.
Data on Wednesday showed that US consumer prices rose in December, with the largest annual increase in inflation in nearly four decades, bolstering expectations that the Federal Reserve will start raising interest rates starting in March.
Gold is considered an inflation hedge, but the metal is highly sensitive to rising US interest rates, which increases the opportunity cost of holding non-interest bullion.
The yield on the 10-year US Treasury rose after falling in the last session, while the dollar index fell to a two-month low.
Among other precious metals, silver rose 0.2% to $23.15 an ounce, platinum fell 0.3% to $974.49, and palladium was little changed at $1,910.60.
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