By Eric Onstad
LONDON (Reuters) - Gold slipped on Tuesday, pressured by a firmer dollar and concern that U.S. inflation data later in the day will be robust, strengthening the case for more U.S. interest rate hikes.
Analysts polled by Reuters forecast the U.S. consumer price index (CPI), due at 1230 GMT, rose 2.2 percent in February year-on-year, compared with a 2.1 percent increase a month earlier.
"If you have a higher than expected CPI reading today it would put more downward pressure on gold, especially if yields also go up," said Georgette Boele, commodity strategist at ABN AMRO in Amsterdam.
"Overall the outlook is not looking that great in the short term. I still expect prices to go towards $1,300."
Spot gold was down 0.3 percent at $1,318.35 per ounce by 1022 GMT, while U.S. gold futures for April delivery fell 0.2 percent to $1,318.70 an ounce.
The dollar index was up 0.17 percent at 90.047, while the dollar jumped to a two-week high against the yen.
A higher U.S. CPI reading could stoke expectations that the Federal Reserve will likely raise interest rates four times, rather than three times, this year. Higher interest rates increase the opportunity cost of holding non-yielding bullion.
"Gold traders are adopting a more neutral stance ... While a March hike is fully priced in, traders usually get a bit anxious awaiting the Fed statement and key forward guidance," said Stephen Innes, APAC trading head at OANDA.
"We should expect interest rate uncertainty to weigh on prices over the short term."
In other precious metals, silver rose 0.1 percent to $16.50 per ounce.
"Silver has been such an underperformer of late and one of the few positive factors currently is that net length is very lean. Despite recent gains, net speculative positions in silver are still only 18 percent of the record."
Platinum fell 0.5 percent to $957.50 an ounce, while palladium was unchanged at $978.50 per ounce.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)