02:00 PM EDT, 06/13/2024 (MT Newswires) -- (Updates prices.)

Gold traded lower midafternoon on Thursday as the dollar rose following a hawkish outlook for interest-rate cuts from the Federal Reserve, even as yields weakened after U.S. producer prices eased in May.

Gold for August delivery was last seen down US$36.70 to US$2,318.10 per ounce, the lowest since May 3.

The Federal Open Market Committee (FOMC) ended its two-day meeting on Wednesday leaving interest rates unchanged, while its dot-plot forecast is predicting just one cut this year. Fed Chair Jerome Powell said the central bank will wait for further data showing inflation is moving towards the bank's 2% target before lowering rates despite a lower than expected rise in May's Consumer Price Index (CPI).

"Gold's...attempted rebound following the U.S. CPI miss was cut short by the FOMC's higher-for-longer message," Saxo Bank noted.

The dollar rose on the dimming prospect for rate cuts, with the ICE dollar index last seen up 0.56 points to 105.21.

However treasury yields narrowed after the U.S. May Producer Price Index fell by 0.2% from April, under the consensus estimate from analysts polled by Bloomberg that called for a 0.1% rise.

The yield on the U.S. two-year note was last seen down 6.3 basis points to 4.697%, while the US 10-year note was paying 4.25%, down 7.3 basis points.