09:06 AM EST, 02/12/2025 (MT Newswires) -- Gold prices continued to retreat from Monday's record high early on Wednesday as the dollar and treasury yields surged after U.S. inflation advanced at a faster-than-expected pace last month.

Gold for April delivery was last seen down US$43.60 to US$2,889.00 per ounce, after closing at a record US$2,934.40 on Monday.

The U.S. Bureau of Labor Statistics reported the Consumer Price Index (CPI) rose 0.5% in January from December, above the prior month's 0.4% increase and more than the consensus expectation for a 0.3% rise, according to FactSet. Core CPI, excluding food and energy prices, rose by 0.4% monthly, up from 0.2% in December and above the 0.3% consensus estimate.

The data comes as Federal Reserve Chair Jerome Powell appears before the House Financial Services Committee in his second day of semi-annual Congressional testimony. In his appearance before the Senate Committee on Banking, Housing, and Urban Affairs on Tuesday, Powell confirmed the central bank is likely to slow interest-rate cuts this year.

"Fed Chair Powell made it clear in testimony before a Senate Panel yesterday that the Fed is in no hurry to cut rates further. There was little reaction to the news as the market continues to assess that the Fed will cut the Fed Funds rate only once more by the September FOMC this year," Saxo Bank noted.

The dollar was sharply higher following the release of the CPI report. The ICE dollar index was last seen up 0.42 points to 108.39.

Treasury yields also rose, raising the carrying cost of owning gold. The U.S. two-year note was last seen paying 4.372%, up 7.6 basis points, while the yield on the 10-year note was up 10.6 points to 4.638%