WASHINGTON (dpa-AFX) - Gold prices fell to eight-week lows on Thursday as longer-dated U.S. bond yields rose alongside the dollar amid expectations for deeper deficit spending during Trump's second presidential term.
Spot gold fell 1.2 percent to $2,541.30 per ounce in European trade, while U.S. gold futures were down 1.6 percent at $2,545.85.
The dollar hit a new one-year high after Wednesday's sticky core inflation print underscored a slowdown in the disinflation process and some Federal Reserve officials shifted their attention back to inflation risk.
Kansas City Federal Reserve chief Jeffrey Schmid on Wednesday said the time is 'now' to reduce U.S. interest rates, but it's still uncertain how much further interest rates will decline.
Dallas Fed President Lorie Logan noted the progress made on inflation but urged caution. Similarly, St. Louis Fed President Alberto Musalem has warned about rising inflation risks.
The 10-year U.S. bond yield hit multi-month highs as investors weighed the prospect of highly expansionary fiscal policy under Trump administration.
In economic releases, the release of reports on U.S. producer price inflation and weekly jobless claims along with remarks by Fed Chair Jerome Powell may garner investor attention later in the day.
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