By Ashitha Shivaprasad
Feb 14 (Reuters) – The price of gold rose on Tuesday as the dollar fell and investors braced for the U.S. inflation report, which could influence the Reserve’s interest rate strategy federal.
* As of 09:33 GMT, spot gold was up 0.5% at $1,861.91 an ounce, after falling to its lowest level since early January in the previous session. U.S. gold futures rose 0.4% to $1,870.50.
* “Gold prices are seeing a modest rebound from one-month lows on lower US and dollar yields ahead of the January CPI report,” said Michael Hewson of CMC Markets. “A high CPI reading could further weaken gold prices.”
* US Consumer Price Index (CPI) data for January will be released at 1.30pm GMT and a Reuters poll forecasts the headline CPI figure to rise 0.5%.
* The dollar index fell 0.3%, making bullion more affordable for buyers of other currencies. The 10-year US Treasury yield was down for the second straight session.
*Although gold is considered a hedge against inflation, it is very sensitive to rising US rates as it increases the opportunity cost of holding the non-interest bearing asset.
* In other precious metals, spot silver was down 0.6% at $21.85 an ounce; Platinum was down 0.2% at $951.81; and palladium fell 1% to $1,551.33. (Edited in Spanish by Carlos Serrano)