Gold retreats from a month’s peak as the dollar and US bond yields rise

Gold fell on Wednesday from a one-month high hit in the previous session. Yet, prices remained in a relatively narrow range, as investors remain cautious in anticipation of US inflation data due this week.

Spot gold fell 0.2 percent to $1,709.60 an ounce by 0644 GMT. US gold futures fell 0.2 percent to $1,712.30.

Gold prices jumped more than 2% on Tuesday to surpass the important $1,700 level, benefiting from weaker dollar and bond yields and technical buying.

The dollar index rose 0.1 percent, making gold more expensive for buyers abroad. US bond yields also rose in Asian trading.

Investors remain focused on the US CPI report due on Thursday. The data is likely to indicate the prospects for a rate hike by the Federal Reserve.

Wall Street economists expect a slowdown in both the monthly and annual core consumer price index to 0.5 percent and 6.5 percent, respectively, according to a Reuters poll.

Traders now expect a 67 percent chance of a 50 basis point rate hike, compared to a 33 percent chance of a 75 basis point rate hike at the Fed’s December meeting.

As for other precious metals, silver fell in spot transactions 0.2 percent to $21.29. Platinum rose 0.5% to $ 1002.76, while palladium fell 0.9 percent to $1,903.59.