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Spot gold fell 0.2% to $1,848.15 per ounce by 0959 GMT. U.S.
gold futures were down 0.2% at $1,849.20.
"We would expect gold to get support from the higher inflation
environment ... The dollar has actually gained quite a bit since
the CPI print and that's prohibiting gold from making gains,"
WisdomTree analyst Nitesh Shah said.
The U.S. dollar index rose to fresh two-decade highs on as
concerns that tighter monetary policies to tame surging
inflation will hurt the global economy dampened risk sentiment
and drove investors into the safe-haven currency. [USD/]
The inflation reading comes on the heels of the Fed raising its
benchmark overnight interest rate by an aggressive
half-a-percentage point last week, the most in 22 years.
There is also the risk of central banks overdoing it and posing
recessionary risks which could support gold, Shah added.
Gold is highly sensitive to rising U.S. interest rates and
higher yields, which increase the opportunity cost of holding
non-yielding bullion and also tend to boost the dollar in which
gold is priced. It is, however, seen as a safe store of value
during economic and political crises.
Declines in gold were, however, limited by a slide in the
benchmark 10-year Treasury yields, which hit the lowest level in
two weeks. [US/]
Spot silver fell 1.4% to $21.25 per ounce, platinum dropped 2.6%
to $966.21 and palladium slid 3.2% to $1,969.85.
(Reporting by Eileen Soreng in Bengaluru; Editing by Vinay
Dwivedi)
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