Gold hits two-week low with firm dollar, inflation data in focus

Gold prices dropped to their lowest level in over two weeks on Thursday as the U.S. dollar strengthened, with investors waiting for key inflation data that could shed light on the Federal Reserve’s monetary policy path.

Spot gold was down 1.2% at $2,882.49 an ounce as of 09:42 a.m. ET (1442 GMT), after hitting its lowest level since February 12 earlier in the session. Prices hit a record high of $2,956.15 on Monday, driven by safe-haven flows.

US gold futures lost 1.2% to $2,894.50.

“The direction of gold is very evident, and these short-term bumps and some profit taking is just a normal part of the cycle,” said Alex Ebkarian, chief operating officer at Allegiance Gold.

The dollar index rose 0.7%, making greenback-priced bullion more expensive for holders of other currencies.

Investors’ focus now turns to the U.S. Personal Consumption Expenditures (PCE) index due on Friday, expected to remain at 0.3% as per a Reuters poll.

Any significant deviation from the estimated PCE data could trigger a negative reaction, based on concerns that the Fed is less likely to lower interest rates, said Bart Melek, head of commodity strategies at TD Securities.

Markets expect the Fed to deliver at least two rate cuts this year, with about 55 basis points of easing priced in for 2025.

Investors are also awaiting insights into U.S. monetary policy from speeches by several officials scheduled later in the day.

Meanwhile, U.S. President Donald Trump said on Thursday that his proposed tariffs on imports from Mexico and Canada will go into effect on March 4 as scheduled, also adding that China will be charged an additional 10% on that day.

Gold is well-positioned to surpass $3,000 an ounce and this could very well occur within the next 30 to 60 days, depending largely on markets’ reaction to the tariffs, Ebkarian said.

Spot silver retreated 0.5% to $31.67 an ounce, platinum fell 0.9% to $957.10 and palladium dropped 0.9% to $917.96.