Gold prices fell more than 1% on Tuesday after a hot U.S. inflation data made the Federal Reserve less likely to lower rates.
Gold declined 1.4% to $2,153.05 per ounce at 3:08 p.m. ET (1908 GMT) from Friday's record high of $2,194.99. US gold futures fell 1% to $2,166.1.
U.S. consumer prices rose strongly in February, showing inflation stickiness. Monthly CPI climbed 0.4% in February. It rose 3.2% annually, exceeding the 3.1% prediction.
"CPI comes in a bit sweaty but the market was expecting a high print, so initial reaction was muted but prices have been volatile since," said New York independent metals trader Tai Wong.
He predicted gold bulls would keep looking for reasons to rise. "Now focus will shift to next week's Fed meeting where there will be an updated dot plot," Wong said of central bankers' interest rate expectations.
The CME FedWatch program estimates a 70% possibility of a U.S. rate drop by June. March 20 is the next U.S. central bank policy meeting.
Low interest rates lower the opportunity cost of storing gold, which earns no interest. Aakash Doshi, head of commodities, North America at Citi Research, expects prices to consolidate around $2,100 and break above $2,200 by the end of the second quarter.
Platinum declined 1.5% to $919.20 while palladium held at $1,031.04. As autocatalyst demand declines, UBS expects palladium to remain oversupplied in the coming years. Silver fell 1.5% to $24.08.
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