Investing.com – Gold prices slipped on Thursday, pulling away from the previous session’s two-and-a-half week highs posted after mixed U.S. economic reports dampened expectations for a more aggressive rate hike policy by the Federal Reserve.
Comex were down 0.18% at $1,355.6 a troy ounce by 02:05 a.m. ET (06:05 GMT), after climbing to a two-and-a-half week of $1,358.50 on Wednesday.
The precious metal initially dropped as the U.S. dollar moved higher after the Commerce Department reported on Wednesday that consumer prices rose more than expected in January by . Year-over-year, consumer prices increased higher last month, beating expectations for a gain of 1.9%.
Rising inflation would be a catalyst to push the Fed toward raising interest rates at a faster pace than currently expected.
However, the greenback’s gains were short lived as a separate report showing that U.S. retail sales fell in January, compared to expectations for a 0.2% rise, sparked concerns that the Fed could struggle to raise rates quickly enough to offset inflation pressures.
Gold is sensitive to moves in both U.S. rates and the dollar. A weaker dollar makes gold less expensive for holders of foreign currency, while a rise in U.S. rates lifts the opportunity cost of holding non-yielding assets such as bullion.
On Thursday morning, the , which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.18% at 88.74, its lowest since February 2.
Elsewhere on the Comex, were down 0.11% at $16.87 a troy ounce.
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Source: Investing.com
