PRECIOUS-Gold gains on softer dollar as investors weigh Trump tariff impact

Updates with mid-session trading

By Anushree Mukherjee

Jan 14 (Reuters) - Gold prices rose on Tuesday, helped by a softer U.S. dollar and inflationary risks posed by President-elect Donald Trump's potential tariff policies, which could influence the pace of Federal Reserve monetary policy easing this year.

Spot gold XAU= was up 0.3% to $2,668.79 per ounce as of 1200 GMT. U.S. gold futures GCcv1 gained 0.1% to $2,682.30.

"Gold prices are benefiting from reports that the incoming Trump administration is considering a gradual implementation of tariff increases to mitigate their impact on inflation," said Ricardo Evangelista, senior analyst at ActivTrades, referring to a Bloomberg report.

"This news led to a slight decline in U.S. Treasury yields and a weakening of the dollar."

The dollar index .DXY fell 0.3% from a more than two-year high hit in the last session as traders scaled back U.S. rate cut bets for 2025 after a strong jobs report. A softer dollar makes gold more affordable for buyers using other currencies. USD/

Investors are looking out for U.S. Producer Price Index (PPI) data at 1330 GMT and Consumer Price Index (CPI) numbers due on Wednesday. A Reuters poll of economists gives a median forecast for an annual rise in CPI of 2.9%, up from November's 2.7%.

Also due is U.S. retail sales on Thursday for further insights into the economy and the Fed's 2025 policy trajectory.

"If inflation increases again based on Trump´s spending policy, we may even see no cuts at all in the mid-term," said Henrik Marx, head of precious metals trading at Heraeus Precious Metals Germany.

Bullion is used as a hedge against inflation, although higher interest rates reduce the non-yielding asset's appeal.

Elsewhere, spot platinum XPT= was down 0.4% to $949.80.

"We look for platinum to be under-supplied by 500,000 ounces, or 6.4% of demand, in 2025," UBS said in a note.

Spot silver XAG= firmed 0.5% to $29.75 per ounce and palladium XPD= climbed 0.5% to $943.70.

(Reporting by Anushree Mukherjee in Bengaluru, additional reporting by Swati Verma; editing by Tasim Zahid and Jason Neely)

((anushree.ashishMukherjee@thomsonreuters.com;))