(Updated at closing. Change wording and author signature)
By Seher Dareen
February 14 (Reuters) –
Gold prices fell after US Federal Reserve officials reiterated the central bank’s tough stance on fighting inflation, following the release of consumer price (CPI) data on Tuesday in line with expectations to.
* Data showed the US CPI rose 6.4% in the 12 months to January, the smallest gain since October 2021. Last month, the CPI rose 0.5% on a monthly basis, also in line with expectations.
* As of 4.37pm GMT, spot gold was down 0.3% at $1,847.53 an ounce, while US bullion futures were up 0.1% at 1 $864.50.
* Gold was up 0.8% at the start of the session after the dollar fell to a nearly two-week low, but the greenback rebounded from its losses and rose 0.2%, making more expensive gold for buyers of other currencies.
* David Meger, director of metals trading at High Ridge Futures, said concerns remain that the Fed will feel the need to be more aggressive when it comes to raising rates and tackling downside inflationary pressures, which will weigh on gold.
* Following the data release, Richmond Fed President Thomas Barkin and Dallas Fed President Lorie Logan said the central bank should focus on bringing inflation down 2% target.
* The Federal Reserve is expected to raise its key rate at least twice more to a range between 5% and 5.25%, with financial markets seeing an almost equal likelihood of another quarter-point hike over the course of boreal summer.
*Although gold is considered a hedge against inflation, it is very sensitive to increases in US interest rates, as the opportunity cost of holding the non-interest bearing asset increases.
* Among other precious metals, spot silver was down 1.4% at $21.65 an ounce; platinum fell 2.5% to $929.90; and palladium fell 4.6% to $1,496.35. (Edited in Spanish by Carlos Serrano and Javier López de Lérida)