Gold prices pared gains on Thursday after higher-than-expected US consumer prices data for December drove concerns that interest rates could stay restrictive for longer, boosting the dollar and Treasury yields.

Spot gold was up 0.1% at $2,024.99 per ounce, as of 9:08am ET (1408 GMT), easing from 0.8% before the data. US gold futures also rose 0.2% to $2,029.30.

The dollar index and Treasury yields extended gains after data showed US consumer prices rose more than expected in December, which could delay a much anticipated interest rate cut in March from the Federal Reserve.

“A modestly more robust CPI report than desired should keep a lid on gold for the session as traders continue to cling to the idea of a March rate cut. Gold is just grudgingly lower and (market) hopes PPI will show softer results tomorrow,” said Tai Wong, a New York-based independent metals.

In a separate report, the Labor Department said initial claims for state unemployment benefits fell by 1,000 to a seasonally adjusted 202,000 for the week ended Jan 6.

Traders see a 63% probability of a rate hike in March from the Fed, according to the CME Fedwatch tool, compared with about a 71% chance seen before the report. Higher rates dim the appeal of gold, which pays no interest.

Attention will turn to U.S. producer prices due on Friday for more cues on Fed’s interest rate outlook.

“The market is expecting a little bit of an increase relative to the prior months in term of the PPI data. But we don’t think that will be a big market driver for gold,” said Daniel Ghali, commodity strategist at TD Securities.

Elsewhere, silver fell 0.4% to $22.77 per ounce, palladium lost 0.3% to $996.19, while platinum was up 0.1% at $919.80.