Gold futures plunged in the middle of the trading week following the fourth consecutive hotter-than-expected US inflation data. The yellow metal has been on a tear and posted another record finish during the Tuesday trading session. With many investors lowering the odds of a June cut to interest rates, the precious metal might respond unfavorably in the fallout of the consumer price index (CPI) figures.

June gold futures tumbled $15.40, or 0.69%, to $2,346.00 per ounce at 13:39 GMT on Wednesday on the COMEX division of the New York Mercantile Exchange. Gold prices have surged 13% year-to-date and have climbed close to 16% over the last 12 months.

Silver, the sister commodity to gold, is also sliding midweek in the CPI aftermath. May silver futures declined $0.199, or 0.71%, to $27.78 an ounce. The white metal rose 16% year-to-date and jumped 20% over the last three months.

According to the Bureau of Labor Statistics (BLS), the US annual inflation rate rose to 3.5% in March, up from 3.2% in February and higher than the market estimate of 3.4%. This represented the fourth consecutive higher-than-expected reading.

The consumer price index (CPI) rose 0.4% monthly.

Core inflation, which strips the volatile food and energy sectors, was unchanged at 3.8%. Core CPI rose at a higher-than-expected rate of 0.4%.

This resulted in a selloff in the financial markets because investors feared that the Federal Reserve would delay the first rate cut again.

The futures market is now penciling in a 21% chance of a rate reduction at the June Federal Open Market Committee (FOMC) policy meeting. Of course, all eyes will be on what Fed Chair Jerome Powell will tell reporters at the post-FOMC meeting in May.

For now, traders are considering the possibility of no rate cuts in 2024.

This is bad news for gold as it is sensitive to higher interest rates because it impacts the opportunity cost of holding non-yielding bullion.

The US Treasury market was up across the board, with the benchmark ten-year yield rallying 12.7 basis points to 4.493%. The two-year yield rose 20.5 basis points to 4.952%, while the 30-year bond added 6.7 basis points to 4.566%.

The US Dollar Index (DXY), a measurement of the buck against a basket of currencies, rocketed 0.86% to 105.04, from an opening of 104.15. A stronger greenback is bearish for gold since it makes it more expensive for foreign investors to purchase.

In other metal markets, May copper futures shed $0.042, or 0.98%, to $4.2435 per pound. May platinum futures declined $7.30, or 0.74%, to $976.80 an ounce. May palladium futures plunged $33.60, or 3.09%, to $1,052.50 per ounce.