Khaberni - Gold prices fell on Monday with the rise of the dollar after the precious metal had registered gains of over two percent in the previous session; as the lower-than-expected US inflation data led to increased expectations of interest rate cuts by the Federal Reserve (the US central bank).
The price of gold in spot transactions dropped 0.4 percent to $5020.10 per ounce (ounce) after it had risen by 2.5 percent in the previous session.
The dollar index rose on Monday, making gold priced in the US currency more expensive for holders of other currencies.
The US Department of Labor said on Friday that the US consumer price index rose 0.2 percent in January, which is less than the economists' expectation of a 0.3 percent increase, after an unadjusted rise of 0.3 percent in December. Typically, lower inflation increases the chances of interest rate cuts.
According to data compiled by the London Exchange Group, market participants currently expect a total reduction in interest rates by 75 basis points this year, with the first cut expected in July.
Gold, which does not yield a return, tends to rise in a low interest rate environment.
For other precious metals, the price of silver in spot transactions dropped 0.6 percent to $76.92 per ounce after rising three percent on Friday.
Platinum fell 0.4 percent to $2054.35 per ounce. Palladium rose 0.4 percent to $1692.23 per ounce.
