• Gold price holds below $2,000 on the stronger USD and upbeat US CPI report. 
• The US Consumer Price Index (CPI) inflation eased to 3.1% in January YoY from 3.4% in December. 
• The ongoing geopolitical tensions in the Middle East and Eastern Europe might cap the downside of the gold price.

Gold price (XAU/USD) drops below the $2,000 psychological mark during the early Asian session on Wednesday. The stronger US inflation data exerts some selling pressure on the yellow metal as it diminishes hopes of an early rate cut. The gold price currently trades around $1,992, unchanged for the day. 

Meanwhile, the US Dollar Index (DXY), an index of the value of the USD measured against a basket of six world currencies, trades near 104.85 after reaching a three-month high of 105.00. The US Treasury yields edge higher, with the 10-year yield standing at 4.32% and the 2-year rate jumping to 4.654%, the biggest one-day jump since May 5, 2023. 


The US Consumer Price Index (CPI) inflation eased to 3.1% YoY in January from 3.4% in December, according to the U.S. Labor Department on Tuesday. On a monthly basis, the headline CPI increased 0.3% in January after rising 0.2% in December. The Core CPI, which excludes food and energy, rose 0.4% in January from a 0.3% increase in December. Over the last 12 months, the figure climbed 3.9% YoY, above the market consensus of 3.7%. 

Traders in financial markets pushed back their interest rate cut expectations to June from May after the upbeat US CPI report. Inflation is slowing down, but not quickly enough to prompt Fed policymakers to begin lowering interest rates soon. Traders will take more cues from the US January Retail Sales and Producer Price Index (PPI) this week for fresh impetus. Gold prices could face further declines if other economic data remains strong.