Gold Drops Below $2000 After Largest Daily Decline Since December 4

Gold remained close to its lowest price in two months on Wednesday, trading below the key level of $2000 per ounce, as a stronger-than-expected US inflation report prompted traders to reduce their bets on larger cuts to US interest rates.

By 0429 GMT, gold settled in the spot market at $1992.21 per ounce, after hitting its lowest levels since December 13th, Tuesday.

The yellow metal dropped by around 1.4 percent on Tuesday, marking the biggest daily decline since December 4th.

The US futures contracts for gold declined by 0.1 percent to $2005.00 per ounce.

Calvin Wong, the senior market analyst for the Asia-Pacific region at Oanda, said that gold has come under pressure after the US inflation report showed an increase in the consumer price index 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 interest rates and also the size of the cuts during the current year.

The data revealed on Tuesday showed a 3.1% increase in the Consumer Price Index on an annual basis, surpassing expectations that predicted a 2.9% growth.

The dollar index hovered near a three-month peak, while 10-year Treasury bond yields approached their highest level in two and a half months.

Regarding the other precious metals, platinum remained stable at $871.90 per ounce, palladium decreased by 0.2 percent to $862.14, and silver declined by 0.2 percent to $22.04. (Reuters)