Gold prices declined on Thursday after rising more than 2 percent in the previous session, as the dollar strengthened ahead of an important inflation report that could provide further clues about the path of U.S. interest rates.

Spot gold fell 0.4 percent to $4,961.57 per ounce by 0112 GMT, following a 2.1 percent gain in the previous session.

U.S. gold futures for April delivery dropped 0.6 percent to $4,981.

Gold and Silver

The dollar reached its highest level in more than a week, making the precious metal more expensive for holders of other currencies.

Markets in mainland China, Hong Kong, Singapore, Taiwan, and South Korea are closed for Lunar New Year holidays, which traders say has reduced trading volumes and limited opportunities for volatility.

According to CME’s FedWatch tool, markets currently expect three interest rate cuts of 25 basis points each this year.

Investors are watching the weekly jobless claims report due later today, as well as personal consumption expenditure (PCE) data, the Federal Reserve’s preferred inflation gauge, scheduled for release tomorrow, for further guidance on the direction of monetary policy.

Gold, which does not yield interest, typically performs well during periods of low interest rates.

Gold rose more than 2 percent on Wednesday as safe-haven demand surged after two days of peace talks in Geneva between Ukraine and Russia ended without progress. Ukrainian President Volodymyr Zelensky expressed dissatisfaction with the outcome, while Washington described it as “tangible progress.”

Among other precious metals, spot silver fell 0.5 percent to $76.83 per ounce after dropping more than 5 percent on Wednesday.

Spot platinum declined 0.1 percent to $2,069.35 per ounce, while palladium fell 0.5 percent to $1,707.53.