After April consumer price inflation came in lower-than-expected on Wednesday, gold prices softened but continued to remain above the crucial $2,000 per ounce mark.

Peter Schiff, chief economist and global strategist at Euro Pacific Capital, said the fall in the prices of yellow metal could be attributed to market participants realizing there needs to be much more improvement in inflation numbers for the central bank to change its path.

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"#Gold sold off as investors realized that the “good” news on #inflation is actually bad, as far more improvement [sic] would be needed to get the #Fed to officially pivot. But persistent inflation is actually very bullish for gold. When investors finally figure that out gold will soar," Schiff said in his tweet.

Spot gold was trading at about $2,045 per ounce level on Wednesday but declined after the inflation report. It was trading near $2,032 per ounce during Thursday afternoon’s Asian trading session.

Schiff also argued that April inflation numbers should not excite anyone given the fact that the 4.9% figure is still well above the central bank's 2% target.

Expert Take: Edward Moya, senior market analyst at OANDA told Reuters there’s still a risk the Federal Reserve will have to keep rates higher for longer. "Gold is going to need more rate cuts to become aggressively priced in for it to continue its rally,” he said.

This is because if interest rates in the U.S. come down, the dollar will soften and a weakened greenback tends to push gold prices higher.

The SPDR Gold Trust (NYSE:GLD) fell 0.14% on Wednesday while the iShares Gold Trust (NYSE:IAU) lost 0.1%.

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