PRECIOUS-Gold holds steady as US data reinforces Fed rate cut bets

By Pablo Sinha

Nov 25 (Reuters) - Gold prices held largely steady on Tuesday, as softer-than-expected U.S. retail sales data reinforced traders' expectations that the Federal Reserve will trim interest rates in December.

Spot gold edged down 0.2% to $4,130.85 per ounce by 09:36 a.m. ET (1436 GMT). Prices earlier in the day hit their highest level since November 14, and rose nearly 2% on Monday after some Fed policymakers signalled support for a third interest rate cut this year.

U.S. gold futures for December delivery rose 0.8% to $4,127.40 per ounce.

"There's revived hope for a December rate cut based on recent dovish Fed speak, and this (data) doesn't seem to be changing that," said Peter Grant, vice president and senior metals strategist at Zaner Metals.

Retail sales increased less than expected in September, taking a breather following a recent stretch of strong gains.

Meanwhile, data showed that for the 12 months through September, the U.S. producer price index increased 2.7% after advancing by the same margin in August. The report was delayed by the 43-day shutdown of the government.

Markets are pricing in an 85% chance of a December rate cut - compared to 30% last week - and a 64% probability of a cut in January, CME data showed. FEDWATCH

Federal Reserve Governor Stephen Miran said on Tuesday that a deteriorating job market calls for further rate cuts, echoing dovish remarks from Fed Governor Christopher Waller on Monday.

Non-yielding gold tends to do well in low-interest-rate environments, and during geopolitical and economic instability.

More broadly, "the underlying conditions of ongoing economic uncertainty, geopolitical turbulence and dovish Fed expectations continue to support gold prices (in the near term)," ActivTrades analyst Ricardo Evangelista said.

Elsewhere, spot silver rose 0.1% to $51.41 per ounce, platinum rose 0.3% to $1,548.80 and palladium lost 0.2% to $1,392.79.