Gold falls on firm yields, dollar; U.S. inflation data in focus

Gold falls on firm yields, dollar; U.S. inflation data in focus

Gold prices slipped on Wednesday, weighed down by higher U.S. Treasury yields and a slight rebound in the dollar ahead of the much-awaited U.S. consumer price data due later in the day. Spot gold was down 0.3% at $1,832.05 per ounce by 0646 GMT. U.S. gold futures eased 0.1% to $1,833.60. "The dollar has strengthened a little bit ... if the inflation rate is higher than expected, it could encourage central banks to consider tightening their monetary policies faster than expected," said Margaret Yang, a strategist at DailyFX. The dollar index was up 0.2%, making gold less appealing for other currency holders. Concerns of a potential acceleration in inflation dragged down the U.S. currency to a more than two-month low in the previous session and drove Asian shares to two-month lows earlier on Wednesday. The U.S. consumer price data due at 1230 GMT is keenly awaited by market participants to gauge inflationary pressure. Benchmark U.S. 10-year Treasury yields US10YT=RR scaled a more than one-week peak, increasing the opportunity cost of holding gold. Some investors view gold as a hedge against higher inflation that could follow stimulus measures, but higher Treasury yields have weighed on non-yielding bullion's appeal this year. "The