US producer price index for Feb increased more than expected
Traders see 64 chance for June rate cut
Silver eased off more than threemonth high

March 14 Reuters Gold slid on Thursday after a larger than expected rise in February39;s U.S. producer price index PPI cooled expectations of early rate cuts by the Federal Reserve, boosting Treasury yields and the dollar.

Spot gold was down 0.9 at 2,155.00 per ounce as of 1148 a.m. EDT 1548 GMT, moving away from a record peak of 2,194.99 hit on March 8. U.S. gold futures also dipped 1 to 2,159.20.

The dollar gained 0.3 against its rivals, making gold less attractive for other currency holders, while benchmark U.S. 10year note yields rose to a more than oneweek high.

I expect to see continued pressure on gold, with all of the data showing the U.S. economy is strong, the labor market still strong, said Chris Gaffney, president of world markets at EverBank.

It really makes investors question just how quickly the Fed39;s going to decide to start cutting rates.

U.S. producer prices increased more than expected in February amid a surge in the cost of goods like gasoline and food, which could fan fears that inflation is picking up again.

Higher inflation adds pressure on the Fed to keep interest rates elevated, weighing on nonyielding assets such as gold.

However, traders continue to bet on interest rate cuts in June, pricing in about a 64 chance compared to 72 before the CPI data earlier this week, according to the CME…