LONDON: Gold prices were choppy on Tuesday as investors braced for likely hot US inflation data that would consolidate bets of aggressive measures from the Federal Reserve to tame rising pricing pressures.

Spot gold was flat at $1,953.26 per ounce, as of 0958 GMT, after hitting its highest in nearly a month on Monday. US gold futures rose 0.4% to $1,955.60.

“A higher-than-expected headline US CPI print may nudge spot gold closer to the psychologically important $2,000 level, considering bullion’s time-honoured role as an inflation hedge,” said Han Tan, chief market analyst at Exinity.

Data due later in the day is likely to show US consumer prices rose by the most in 16-1/2 years in March, which would seal the case for the Fed to raise interest rates by a hefty 50 basis points next month.

Pressuring gold slightly, the dollar held firm, supported by high US yields.

A stronger dollar makes greenback-priced gold more expensive, while higher US interest rates and yields increase the opportunity cost of holding zero-yield bullion.

“They (the Fed) can print dollars, but they can’t print commodities and economic growth in quite the way that they would like,” independent analyst Ross Norman said.

“The chance of a significant policy error in not responding quicker (to inflation) looks ever greater and that will feed into gold.”

Auto-catalyst metal palladium dropped 4% to $2,335.96, after hitting its highest since March 24 at $2,550.58 on Monday following a sale block by London markets.

Given the supply concerns, the drop in palladium was “something of an anomaly,” Norman said, adding that the real impact on the economy from cutting off key palladium and platinum refiners might take a little time to manifest after the initial knee-jerk reaction.

Spot silver dropped 0.5% to $24.96 per ounce and platinum dipped 1.6% to $961.13.