NEW YORK ( TheStreet) -- Rate hike worries were pressuring gold prices Thursday as Brazil led the charge to control inflation. The selloff was accelerated by solid economic data from the U.S. and technical trading.

Gold for February delivery was lost $23.70 to $1,346.50 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,370.90 and as low as $1,342.40 during Thursday's session. The spot gold price was down more than $18, according to Kitco's gold index.

The U.S. dollar indexwas rising 0.14% to $78.74 while the euro was flat at $1.34 vs. the dollar.

Brazil enacted an aggressive interest rate hike of 50 basis points to 11.25% after inflation almost reached 6% in 2010. One of the big pressures on emerging-market economies has been the slide in the U.S. dollar, especially leading up to the second round of quantitative easing.

An inflow of U.S. dollars into the system wreaked havoc on higher-yielding currencies which became more attractive to foreign investors. Brazil took the step last Friday of essentially trying to buy up dollars to eliminate some pressure on the real, but Thursday's move is much more aggressive.

Although countries like Brazil will have to hike a lot to really make a dent in the inflation picture, the move was pressuring gold. China might follow Brazil's lead, although its path is a bit more shaky.

As was disclosed Wednesday, China's economy grew 10.3% in 2010 (9.8% in the fourth quarter), and consumer prices rose 4.6% in December vs. a year ago. All told, prices jumped 3.3% last year.

The inflation reading of 4.6% is slightly lower than the 5.1% increase in November, and it might take some pressure off the country to raise interest rates. But with a real interest rate of negative 1.85%, China may eventually decide it has no choice but to its tighten monetary policy further.

China hiked its interest rate by 25 basis points on Dec. 27 and it increased the amount of money banks must hold in their reserves on Friday, the seventh time in the past year. Currently the one-year deposit rate is 2.75%.

A negative real interest rate environment is great for gold buyers in that country as an investment into gold winds up being worth more.

If you liked this article you might like

Here's the Hottest New Way to Get Rich With Gold

How to Invest in Unstoppable Gold Prices

Novice Trade: Gold ETF

Will Gold Make You 25,000% Richer Like Bitcoin?

How to Tackle Investing: Cramer's 'Mad Money' Recap (Thursday 9/7/17)