Spot gold was lower 0.1% at $2,024.99 per ounce after advancing as much as 0.8% before the data
Gold eased on Thursday to a one-month low as the dollar rose after hotter-than-expected inflation data, while hawkish remarks from Fed officials fuelled concerns that higher interest rates could stay unchanged beyond March.
Spot gold was lower 0.1% at $2,024.99 per ounce, as of 1930 GMT, after advancing as much as 0.8% before the data.
U.S. gold futures settled 0.4% down at $2019.20.
The dollar index extended gains after figures showed U.S. consumer prices increased more than expected in December, which could delay a much expected U.S. rate cut in March.
Cleveland Fed President Loretta Mester said it would likely be too soon for the Fed to cut its policy rate in March, while Richmond Fed chief Tom Barkin said gains on inflation have been too narrowly focused on goods.
We got a little ahead of ourselves, said Phillip Streible, chief market strategist at Blue Line Futures, adding that the hawkish comments call into question the timing and number of rate cuts that the market expects this year.
Traders see a 67% chance of a rate cut in March, as per the CME Fedwatch tool, compared with around a 71% probability seen before the report. Higher rates reduce the appeal of gold, which pays no interest.
There has been a lot of hype behind bitcoin, so people tend to rotate out of different asset classes and that could also be behind some degree of the selling, Streible said.
Attention will turn to the U.S. PPI due on Friday.
Gold is just grudgingly lower and the market hopes PPI will show softer results tomorrow, said Tai Wong, a New York-based independent metals analyst.
