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%Gold prices have fallen to their lowest level in two months as uncertainty about the timing of interest rate cuts grows.

The decline comes after a hotter than expected inflation report in the U.S. for January leads investors and traders to re-evaluate their expectations for rate cuts this year.

Futures traders are now placing the odds of an interest rate cut by the U.S. Federal Reserve in May of this year at about 50%, down from 90% a week ago.

As uncertainty grows, the spot price of gold is trading at $1,997.10 U.S. per ounce, its lowest level since Dec. 13 of last year.

Markets are now betting that the U.S. central bank will wait until June of this year before beginning to lower interest rates. The rate cuts are expected to be a tailwind for gold.

Investors are turning their attention to upcoming economic data, notably U.S. retail sales and initial jobless claims data, for signs of how the U.S. economy is holding up.

If the data shows that the U.S. economy is cooling, it could revive hopes that interest rates will be cut sooner rather than later, sparking a rally in gold.

The price of gold hit an all-time high of $2,135.39 U.S. an ounce in December 2023 after Fed Chair Jerome Powell said that he expects at least three interest rate cuts this year.