Gold Edges Lower Ahead Of US CPI Data

Gold prices fell on Tuesday after rallying sharply the previous day on concerns over the fallout from the collapse of Silicon Valley Bank and Signature Bank.

Spot gold dropped 0.7 percent to $1,901.13 per ounce, while U.S. gold futures were down 0.6 percent at $1,905.80.

Worries of a wider contagion persist despite the Biden administration assuring that there won't be a relapse of the financial crisis from 15 years ago.

The dollar rebounded slightly after hitting a one-month low in the previous session.

Bond yields also rebounded a little bit as investors await key U.S. consumer price inflation data later in the day for clues on the path for interest rates.

The consumer price index is expected to have risen by 6 percent year-over-year in February compared to 6.4 percent in January.

Traders shifted back to betting Fed rate cuts amid the fallout from SVB and lingering worries about contagion.

Some economists now expect no rate increase at all when the Federal Reserve delivers its interest-rate decision later this month.

Rate hike expectations for the ECB this week and the BOE next week have also been pared.

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