Ammon News - Gold prices fell on Thursday, hit by a firmer U.S. dollar and elevated Treasury yields, while traders awaited more U.S. economic data that could steer hopes for a mid-year rate cut by the Federal Reserve.

Spot gold fell 0.3% to $2,166.90 per ounce as of 0742 GMT. U.S. gold futures dipped 0.4% to $2,172.00.

The U.S. dollar index (.DXY), gained 0.1%, while the 10-year Treasury yield was above its 200-day moving average at 4.2036%.

A firmer dollar makes gold more expensive for other currency holders and higher bond yields decrease the appeal of the non-yielding bullion.

Investors await U.S. retail sales data, the producer prices index (PPI) report and jobless claims due later in the day to gauge the U.S. economy's health and if it will deter the Fed from cutting rates in June.

"There was a mini pullback in gold prices after U.S. CPI data release, but it doesn't change the market's view by much on U.S. monetary policy," said Kelvin Wong, a senior market analyst for Asia Pacific at OANDA.

"With today's PPI data, if the core annual figure reading appears near expectations, I still reckon that gold price could remain supported."

Traders see a 67% chance of a June rate cut, according to LSEG's interest rate probability app, down from 72% before data suggested some stickiness in inflation.

The Fed will release its latest 'dot plot' projections at its policy meeting next week. The December meeting projected three-quarter-point rate cuts for 2024.

Other catalysts that could move gold prices could be further bad news on China's housing market and its local government funding mechanism, and trends in consumer demand, said Nicholas Frappell, global head of institutional markets at ABC Refinery.

Frappell expects official sector demand to remain supportive for gold prices this year.

Spot platinum fell 0.3% to $938.80 per ounce, palladium shed 0.2% to $1,057.57 and silver dropped 0.5% to $24.92, after hitting a more than four-month high earlier in the session.

Reuters