Gold tumbles under pressure from rate hike concerns

By Ashitha Shivaprasad

Feb 15 (Reuters) – Gold prices fell to their lowest level in more than a month on Wednesday, after consumer price data in the United States showed an acceleration in inflation in January, stoking concerns about a tightening of monetary policy by the Federal Reserve this year.

* Spot gold was down 1% at $1,836.67 an ounce at 09:51 GMT, its lowest level since early January. US gold futures also fell 1% to $1,846.30.

* The Labor Department said on Tuesday that the US consumer price index rose 0.5% in January.

* “Interest rate expectations for this year have tightened significantly, which is weighing on gold,” said Craig Erlam, market analyst at OANDA.

* The price of gold has fallen more than 6% since Feb. 2, when bullion hit a nine-month high.

* Federal Reserve officials said on Tuesday that the U.S. central bank will need to keep raising interest rates gradually and suggested that lingering price pressures, fueled by a boiling labor market, could drive up costs borrowing higher than they had anticipated.

* Gold is traditionally considered a hedge against inflation, although rising interest rates increase the opportunity cost of holding the non-performing asset.

* The dollar index rose 0.3%. A stronger greenback makes bullion, which is priced in dollars, less attractive to buyers of other currencies.

* Among other precious metals, spot silver was down 1.6% at $21.50 an ounce and platinum was down 0.9% at $922.72, while palladium was down 1.6% to $1,472.76, its lowest level since August 2019.

(Reporting by Ashitha Shivaprasad in Bengaluru; Editing in Spanish by Ricardo Figueroa)