Gold below $2,000 level as US rate cut bets recede

Gold remained close to its lowest price in two months on Wednesday and traded below the key level of $2,000 an ounce, as a stronger-than-expected report on inflation in the United States prompted traders to reduce their bets on deeper US interest rate cuts.

According to Reuters, by 0429 GMT, gold settled in spot transactions at $1,992.21 per ounce after recording its lowest levels since December 13 on Tuesday.

The yellow metal fell about 1.4% on Tuesday, the largest daily decline since December 4, and US gold futures fell 0.1% to $2,005.00 an ounce.

Kelvin Wong, chief market analyst for the Asia-Pacific region at OANDA, said that gold was under pressure after the US inflation report showed that the consumer price index rose more than expected in January.

He added that this led to a delay in the expected timing of the Federal Reserve (the US central bank) reducing the interest rate, as well as the size of the cuts during the current year.

Data on Tuesday showed that the consumer price index rose 3.1% year-on-year, exceeding expectations of a 2.9% increase.

The dollar index hovered near a 3-month peak, while 10-year Treasury yields approached a 2-1/2-month high.

As for other precious metals, platinum settled at $871.90 per ounce, palladium fell 0.2% to $862.14, and silver fell 0.2% to $22.04.