Gold rose on Tuesday as consumer prices for March hit their highest level since 1981, a sign to some investors that inflation could be peaking.
Spot gold rose 0.66% at $1,966.42 per ounce after hitting its highest in nearly a month on Monday. U.S. gold futures rose 1.13% at $1,970.2
"A higher-than-expected headline U.S. CPI print may nudge spot gold closer to the psychologically important $2,000 level, considering bullion's time-honored role as an inflation hedge," said Han Tan, chief market analyst at Exinity.
The dollar index touched above 100, testing last week's near two-year high of 100.17, while the benchmark 10-year Treasury yield briefly rose to its highest since December 2018.
A stronger dollar makes gold less attractive for other currency holders, while higher U.S. interest rates and yields increase the opportunity cost of holding bullion, which is also used as a hedge against inflationary pressures.
Auto-catalyst metal palladium fell 4.35% to $2,326.34 per ounce, after hitting its highest since March 24 at $2,550.58 on Monday following the suspension of trading of the metal sourced from Russia in the London hub.
Spot silver rose 1.25% to $25.39 per ounce and platinum slipped 1.2% to $965.02.