09:29 AM EST, 12/12/2024 (MT Newswires) -- Gold prices dropped early on Thursday following four days of gains as U.S. wholesale prices rose more that expected last month, though the data is unlikely to convince the Federal Reserve's policy committee to stand pat on interest rates at the its meeting next week.

Gold for February delivery was last seen down US$21.80 to US$2,734.90 per ounce.

The drop comes as the U.S. Bureau of Labor Statistics reported its November Producer Price Index (PPI) rose by 0.4% from October, above consensus estimate for a rise of 0.2%, according to Marketwatch. However Core PPI, which excludes foods, energy, and trade services, rose by just 0.1% in the month, down from 0.3% in October and under the consensus estimate for a 0.2% rise.

The data is unlikely to alter expectations the Federal Open Market Committee will cut rates by 25 basis points at the end of its two-day meeting next Wednesday. The CME FedWatch Tool now sees a 98.2% probability for the cut, up from 71% a week ago.

The dollar was steady following the data, with the ICE dollar index last seen unchanged at 106.71 points.

Treasury yields rose early, with the U.S. two-year note last seen paying up 0.09 basis points to 4.166%, while the yield on the 10-year note was up 1.7 points to 4.292%.