The latest inflation report slashed the risk that the Fed could go back to hiking interest rates this year, Wall Street strategists say.

Gold prices pared gains on Wednesday after a U.S. consumer inflation report offered mixed signals about the future path of rate cuts this year, even as a drop in the U.S. dollar and Treasury yields limited bullion's losses.

Gold prices surged to a one-month peak on Thursday, nearing $2,700 per ounce, as softer U.S. inflation data fueled hopes of lower interest rates in 2025. Spot gold rose to $2,697.45 an ounce, while February gold

The Labor Department released the inflation report for December, which showed prices were up 2.9% from a year ago, in line with economists expectations and up from 2.7% in November.

The consumer price index increased by 2.9 percent in December from a year earlier, the Labor Department reported Wednesday, in line with economists’ expectations and hotter than a 2.7 percent rise in November. It was also above a 2.6 percent annual increase in October.