Gold prices retreated Tuesday as the dollar firmed ahead of a reading on U.S. consumer-level inflation that could push the Federal Reserve into more-aggressive interest-rate moves this year.
April gold GCJ8, -0.14% slipped $1.90, or 0.1%, to $1,318.90 an ounce.
The ICE U.S. Dollar Index DXY, +0.12% was up 0.2% at 90.062, and if that action continues, the dollar could notch its first gain in thee sessions. Dollar-yen USDJPY, +0.75% traded at a two-week high.
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Consumer prices are due at 8:30 a.m. Eastern, with economists polled by MarketWatch forecasting a 0.2% gain for February, with a prediction for milder inflation owing to lower gasoline prices. Core prices, which strip out gas and food, are expected to rise by the same amount.
On an annual basis, headline consumer prices likely held steady at 2.1% in January, and core prices were unchanged at 1.8%.
Read: What to watch in the CPI report
A stronger-than-expected inflation number could nudge the central bank closer to four hikes instead of the three that the Federal Reserve has tentatively worked into its plans. The Fed is expected to increase interest rates in March, but the jury out on how aggressively it will act beyond that. For this reason, investors have become hypersensitive to inflation data.
Plus: Inflation is rattling markets — here’s what you should know about consumer prices
Rising inflation could add pressure on the Fed to speed up its rate rises, which could lift the dollar, though strangle the stock market. Gold, in turn, although negatively affected by higher interest rates, could attract hedging demand against too-hot inflation.
As for other metals, May silver SIK8, -0.13% fell 1 cent, or 0.1%, to $16.525 an ounce.
Net long positions in U.S. silver futures increased for the first time since January, UBS analyst Joni Teves said in a note.
“Silver has been such an underperformer of late and one of the few positive factors currently is that net length is very lean. Despite recent gains, net speculative positions in silver are still only 18% of the record,” she said.
Read: Silver is poised to outpace gold this year
Among exchange-traded funds, the silver-focused exchange-traded iShares Silver Trust SLV, -0.13% and the SPDR Gold Shares GLD, +0.00% registered limited action in early trading. The VanEck Vectors Gold Miners ETF GDX, +0.88% however, added 0.6%.
May copper HGK8, +0.05% was little changed at $3.125 a pound. April platinum PLJ8, +0.07% rose 0.1% to $964.00 an ounce and June palladium PAM8, +0.96% rose 0.8% to $975.20 an ounce.