* Palladium set to snap five straight weeks of gains
* Dollar down for third session in a row
* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl
(Updates prices)
By Karthika Suresh Namboothiri and Diptendu Lahiri
July 12 (Reuters) - Gold prices inched higher on Friday as
investors shrugged off concerns that stronger-than-expected
consumer inflation in the United States could influence the U.S.
central bank's decision on aggressive monetary policy easing.
Spot gold XAU= rose 0.7% to $1,412.88 per ounce as of 1:47
p.m. EDT (1748 GMT), having touched $1,413.41 earlier in the
session. Prices have risen nearly 1% so far this week.
U.S. gold futures GCcv1 settle 0.4% up at $1,412.20 per
ounce.
"Inflation data came out a little bit hotter than expected.
It seems every day that the probability of rate cut versus
keeping rates unchanged is flip-flop. There are uncertainties
around that," said Phillip Streible, senior commodities
strategist at RJO Futures.
"If gold closes below $1,400 level on a Friday, (it) could
be a blow to the bulls. I see a resistance level of $1,441 if
there is enough demand for gold."
The core U.S. consumer price index, excluding food and
energy, rose 0.3% in June, data showed on Thursday, the largest
increase since January 2018. rates were quick to slump following the data,
shedding nearly 1% in the latter part of its session, with the
dollar erasing some losses.
However, the stronger-than-expected reading failed to shake
convictions that the Fed will start cutting interest rates at a
policy meeting later this month, with money markets still
indicating one rate cut at the end of July and a cumulative 64
basis points in cuts by the end of 2019.
Against a basket of currencies, the dollar .DXY was lower
for a third straight day, down 0.1%.
Lower interest rates may be needed to help lift inflation
and bolster the Fed's credibility in meeting an inflation target
it has consistently underrun, Chicago Federal Reserve president
Charles Evans said. Fed policymakers are scheduled to meet on July 30-31, where
investors will look for further cues on monetary policy easing.
In the physical market, gold buying stalled in top Asian
hubs this week as consumers sold back bullion to cash in on the
steep price rally. A recent import duty hike further dented waning interest in
an Indian market hit by a surge in local rates.
Among other precious metals, platinum XPT= rose 0.4% to
$824 per ounce while, palladium XPD= fell 1.1% to $1,544.25.
Silver XAG= rose 0.8% to $15.23 an ounce.
Palladium was set for its first weekly decline in six weeks,
down 1.4% in the week.