PRECIOUS-Gold prices steady as investors await key US inflation data

By Sherin Elizabeth Varghese

Aug 12 (Reuters) - Gold prices steadied on Tuesday after the previous session's sharp sell-off in U.S. futures from record levels, with investors now focusing on U.S. inflation data that could shape the Federal Reserve's rate-cut timeline.

Spot gold XAU= was little changed at $3,345.59 per ounce as of 1046 GMT, while U.S. gold futures GCcv1 for December delivery were down 0.2% at $3,394.10.

Bullion slid 1.6% to a more than one-week low on Monday and futures dropped more than 2% after U.S. President Donald Trump said on social media he would not impose tariffs on imported bullion.

A report that Washington has imposed tariffs on imports of 1-kg bullion bars sent U.S. gold futures to record highs on Friday.

Comex front-month gold futures are now in line with London spot after reaching a near $40/ounce premium on Friday, said Nitesh Shah, commodities strategist at WisdomTree.

"However, in the absence of an official statement, this convergence may prove temporary, and the two prices could diverge again if uncertainty resurfaces," he said.

Focus is also on the U.S. consumer prices index report due at 1230 GMT. Economists polled by Reuters expect core CPI to have risen 0.3% in July, pushing the annual rate to 3%, drifting further away from the Fed's 2% target.

"After recent surprise weak labor data, if inflation numbers come in softer, market expectations for a rate cut are likely to rise, which would support gold," said ANZ Commodity Strategist Soni Kumari.

CME's FedWatch Tool shows markets are pricing in an 85% chance of a rate cut next month. Looser monetary policy, coupled with political and economic uncertainty, tends to benefit gold. FEDWATCH

Attention is also shifting to the Fed's leadership beyond the current cycle, with Chair Jerome Powell's term ending next May.

Elsewhere, spot silver XAG= gained 0.3% to $37.70 per ounce, while platinum XPT= rose 0.9% to $1,338.84 and palladium XPD= climbed 1.2% to $1,149.25.

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