Gold falls as dollar firms, traders await more US data

Gold prices fell on Thursday, hit by a firmer U.S. dollar and elevated Treasury yields, while traders awaited more U.S. economic data that could steer hopes for a mid-year rate cut by the Federal Reserve.

Spot gold GOLD fell 0.3% to $2,166.90 per ounce as of 0742 GMT. U.S. gold futures GOLD dipped 0.4% to $2,172.00.

The U.S. dollar index DXY gained 0.1%, while the 10-year Treasury yield was above its 200-day moving average at 4.2036%.

A firmer dollar makes gold more expensive for other currency holders and higher bond yields decrease the appeal of the non-yielding bullion.

Investors await U.S. retail sales data, the producer prices index (PPI) report and jobless claims due later in the day to gauge the U.S. economy's health and if it will deter the Fed from cutting rates in June.

"There was a mini pullback in gold prices after U.S. CPI data release, but it doesn't change the market's view by much on U.S. monetary policy," said Kelvin Wong, a senior market analyst for Asia Pacific at OANDA.

"With today's PPI data, if the core annual figure reading appears near expectations, I still reckon that gold price could remain supported."

Traders see a 67% chance of a June rate cut, according to LSEG's interest rate probability app, down from 72% before data suggested some stickiness in inflation.