Gold prices fell on Thursday after a rise of more than 2% in the previous session, as the U.S. dollar gained strength ahead of a significant inflation report due later this week, which could provide additional clarity on the trajectory of U.S. interest rates. Spot gold saw a decrease of 0.4%, closing at $4,961.57 per ounce by 0112, after a 2.1% rise in the previous session. U.S. gold futures for April delivery saw a decrease of 0.6%, closing at $4,981. The dollar hit its highest point in over a week, leading to increased costs for bullion priced in dollars for those holding other currencies.

The markets in Mainland China, Hong Kong, Singapore, Taiwan, and South Korea were closed for the Lunar New Year holidays, leading to low trading volumes and possibly volatile movements, as noted by traders. U.S. Federal Reserve policymakers nearly unanimously agreed to keep interest rates unchanged during last month’s meeting. There was a split on future actions, with some members considering rate hikes if inflation remains high, while others leaned towards further cuts if inflation falls. Markets are expecting three rate cuts of 25 basis points this year, according to CME’s FedWatch Tool.

Investors are currently looking forward to the release of the weekly jobless claims report later today, along with the Personal Consumption Expenditure data, which is the Federal Reserve’s preferred measure of inflation, set for Friday, to gain further insights into monetary policy direction. Non-yielding bullion typically does well in settings marked by low interest rates. Gold saw a rise of more than 2% on Wednesday, fueled by safe-haven demand after two days of inconclusive peace talks in Geneva between Ukraine and Russia.

Ukrainian President Volodymyr Zelenskiy voiced his disappointment with the outcomes, differing from Washington’s view of “meaningful progress.” Spot silver fell by 0.5% to $76.83 per ounce after a decline of over 5% on Wednesday. Spot platinum decreased by 0.1% to $2,069.35 per ounce, while palladium dropped by 0.5% to $1,707.53.