The precious metal saw a moderation in its price on Tuesday, as traders booked some profits ahead of important U.S. data on inflation that are generally anticipated to influence interest rate trends.  

Gold prices fell for the first time in the last ten trading days but consolidated at around $2,184 an ounce. The US dollar’s decline and the yields on US Treasury bonds aided support for the yellow metal’s continuation of its correction from its all-time high of $2,195.  

Growing expectations for interest rate cuts as early as June, alongside a rise in demand for safe-haven assets, caused bullion prices to soar to all-time highs in March, with spot prices nearly reaching $2,200 per ounce. 

However, the recent price action shows a cooling of this rally, particularly following the Federal Reserve’s somewhat hawkish signals and inconsistent labor market data. The dollar’s recovery from its recent decline put pressure on the metal markets. 

The 14-day Relative Strength Index indicates that overbought conditions on the daily chart point to a correction in the works, which is consistent with the near-term technical outlook for the price of gold. 

Before the crucial US Consumer Price Index inflation data to be released on Tuesday at 12:30 GMT, the US Dollar entered a downside consolidation phase.  

Following a sharp downward revision to the January Nonfarm Payrolls number and a string of dismal US economic data, attention is still focused on the key inflation gauge. The reading is expected to show that inflation remained sticky in February and was well above the Federal Reserve’s 2 percent annual target.  

The inflation figure will also be closely watched after several Fed members, including Fed Chair Jerome Powell, stated that the timing and amount of any rate reductions this year will be directly correlated with the inflation trajectory. 

The inflation data is also anticipated to provide additional guidance to the markets following last week’s nonfarm payrolls data, which sent mostly conflicting messages. Any significant decreases in interest rates this year are anticipated to help gold, a belief that has been a major factor in the yellow metal’s recent surge.