Gold set for third weekly rise as soft inflation data cements Fed cut bets
US PPI data due at 1230 GMT
Fed's Goolsbee says economy looks back on track to 2% inflation
Platinum, palladium set for weekly declines
Updates prices and graphic as of 1214 GMT
By Daksh Grover
July 12 (Reuters) -Gold prices fell from a seven-week high hit in the previous session on Friday, but was headed for a third straight week of gains after a weaker-than-expected U.S. inflation data boosted bets of interest rate cuts in September.
Spot gold XAU= dipped 0.5% to $2,402.56 per ounce, as of 1214 GMT, as the dollar recouped some losses from the previous session. The bullion was up nearly 0.5% for the week so far after last week's 2.8% gain. USD/
U.S. gold futures GCcv1 fell 0.6% to $2,407.80.
Gold prices rallied to their highest since May 22 on Thursday after an unexpected decline in U.S. consumer prices. The data strengthened the view that the disinflation trend has resumed and fuelled investor optimism that the Federal Reserve is one step closer to considering rate cuts.
"The Fed has been adopting an increasingly dovish stance, admitting that consumer prices are moving in the right direction and that inflation doesn't have to reach 2% for the central bank to start cutting rates," said Ricardo Evangelista, senior analyst at ActivTrades.
Focus now shifts to the U.S. producer price index (PPI) reading, due at 1230 GMT.
Markets are now pricing in a 94% chance of a rate cut in September, compared to a 70% chance before the data was released, according to the CME FedWatch Tool. Another cut is expected by December.
Lower interest rates reduce the opportunity cost of holding the non-yielding bullion.
Spot silver XAG= fell 2.3% to $30.72 per ounce after scaling an over one-month high on Thursday.
Platinum XPT= was 1.1% lower at $992.85 and palladium XPD= was down 2.6% to $969.00. Both metals were set to register weekly declines.
"We still consider the new technologies so far to be insufficient to offset the loss in autocatalyst demand, particularly for palladium, and therefore remain long-term bearish," Citi said in a note.
Spot gold price in USD per oz https://reut.rs/4cXLz8m
Reporting by Daksh Grover in Bengaluru; Editing by Eileen Soreng and Vijay Kishore
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