Gold traded gloomy in the Asian session, as investors began to distance themselves from the market following the Chinese New Year holiday causing a slow movement in trading today.
The precious metal fell again to around $ 1,836 per ounce, after soaring at $ 1,855 per ounce, driven by initial investor reactions following the release of US inflation data during the New York session.
The U.S. Department of Labor reported the consumer price index rose 0.3% in January, after rising 0.4% in the previous month. Meanwhile, core inflation was weaker than expected by recording unchanged readings.
The benchmark U.S. treasury yield fell to a one-week low on Wednesday, while the greenback dollar plunged to a two-week low after US inflation data was released.
Although the published inflation figures initially supported gold trading, it fell again after investors reviewed the reading which in fact showed that US inflation was still weak.
Usually, gold is considered a hedge against inflation.
Meanwhile, Federal Reserve Chairman Jerome Powell's statement earlier this morning appeared to have little effect on the yellow metal.
In a speech to the Club of Economics of New York, Powell reiterated the central bank's commitment to keep interest rates low so that employment and inflation targets can be achieved.
