Gold prices edged higher on Wednesday after dropping more than 1 per cent in the previous session, as investors digested hotter-than-expected US inflation data and still banked on a Federal Reserve interest rate cut in June, reports Reuters.
Spot gold edged up 0.4 per cent to $2,164.69 per ounce, as of 1212 GMT. Bullion posted its worst single-day drop since February 13 on Tuesday. US gold futures rose 0.2 per cent to $2,170.00.
"The market driver behind the decline of gold is quite clear as the US CPI numbers came in higher than expected," said Carlo Alberto De Casa, a market analyst at Kinesis Money.
"It's just a psychological correction after a long strike of positive days and markets are realizing that the Fed will not cut rates too quickly."
Bullion slumped 1.1 per cent on Tuesday as data indicated that US consumer prices rose sharply in February, above expectations, indicating some stickiness in inflation.
Spot platinum rose 1.2 per cent to $935.25 per ounce, palladium gained 2.8 per cent to $1,070.25 and silver was up 0.7 per cent to $24.33.
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