2024.01.1118:07:00UTC+00Gold Futures Settle Lower As Dollar Rises After Inflation Data

Gold futures came off early highs and settled lower on Thursday as the dollar climbed higher on bets the Fed will keep interest rates higher for longer after data showed a bigger than expected increase in U.S. consumer prices in December.

The dollar index, which stayed week during the Asian and European sessions, moved higher after the Labor Department released the consumer price inflation data for December.

The dollar index climbed to 102.76 around mid morning, and despite easing to 102.52, remained in positive territory, gaining about 0.15%.

Gold futures for February ended down $8.60 at $2,019.20 an ounce, dropping from a high of $2,056.10 an ounce.

Silver futures for March ended lower by $0.361 at $22.595 an ounce, while Copper futures for March settled at $3.7765 per pound, down $0.0045 from the previous close.

The U.S. Labor Department said its consumer price index climbed by 0.3% in December after inching up by 0.1% in November. Economists had expected consumer prices to rise by 0.2%.

The report also showed the annual rate of consumer price growth accelerated to 3.4% in December from 3.1% in November. The annual rate of growth was expected to tick up to 3.2%.

Meanwhile, the annual rate of growth by core consumer prices slowed to 3.9% in December from 4% in November. Economists had expected the pace of core price growth to decelerate to 3.8%.

A number of economists have said the data makes the U.S. central bank less likely to cut interest rates in March, with many predicting the central bank will hold off until its May meeting.

A separate report released by the Labor Department showed first-time claims for U.S. unemployment benefits unexpectedly edged slightly lower in the week ended January 6th, falling to 202,000, a decrease of 1,000 from the previous week's revised level of 203,000. Economists had expected jobless claims to rise to 210,000 from the 202,000 originally reported for the previous week.