Gold Falls on Dollar Strength Ahead of US Inflation Data

By Ashitha Shivaprasad

Feb 13 (Reuters) – Gold prices edged lower on Monday as the dollar strengthened but remained rangebound as traders refrained from making big bets ahead of key data US inflation this week, which could guide the Federal Reserve’s interest rate hike strategy.

* As of 09:06 GMT, spot gold was down 0.3% at $1,859.86 an ounce, and US gold futures were down 0.1% at 1,873, $60.

* The dollar index rose 0.1%. A stronger US currency makes bullion, which is priced in US dollars, more expensive for foreign buyers.

* The yield on the 10-year Treasury note remained near its highest level since Jan. 6.

* “Gold seems reluctant to make massive moves with the looming US inflation data,” Exinity’s Han Tan said.

* “Further evidence that inflation remains stubbornly high should drive gold to unwind its year-to-date gains,” but if inflation slows, the Fed could halt hikes and there’s a better chance for gold to reach $2,000, Tan added.

* Although gold is generally considered an inflation hedge, rising rates translate into a higher opportunity cost of holding bullion, which does not earn interest.

* In other precious metals, spot silver was down 0.4% at $21.90 an ounce; platinum fell 0.7% to $937.69; and palladium rose 0.2% to $1,545.88.

(Edited in Spanish by Carlos Serrano)