Gold prices relinquished some of their recent gains. Data showing higher-than-expected inflation in the US sparked fears that interest rates might remain elevated for longer than market participants had anticipated. Following the release of this data, the dollar and the yield on Treasury bonds increased.

As of 14:08 Greenwich Mean Time, spot gold prices rose 0.1% to $2024.99 per ounce. Prior to the release of the US data, gold was trading up 0.8%. Gold futures on COMEX gained 0.2%, reaching $2029.30 per ounce.

The dollar index and Treasury yields continued to climb after the US inflation data was released. Given the still-high pace of price increases, the market's expected Federal Reserve interest rate cut in March could be postponed.

Meanwhile, the number of initial jobless claims in the US for the week of December 31 to January 6 fell by 1,000, adjusting to 202,000 after seasonal fluctuation corrections.

According to the CME's Fedwatch tool, traders now see a 63% chance of a Federal Reserve rate hike in March, down from 71% before the release of the US data on Thursday. Higher interest rates make gold, which does not yield interest, less attractive to investors.