PRECIOUS-Gold little changed with inflation data in focus

By Sarah Qureshi and Anushree Mukherjee

Aug 27 (Reuters) - Gold was little changed on Wednesday as investors closely awaited upcoming inflation data for clues on interest rate cuts, while concerns about the Federal Reserve's independence lingered after U.S. President Donald Trump tried to fire a Fed governor.

Spot gold XAU= was up 0.1% to $3,394.49 per ounce at 02:22 p.m. ET (18:22 GMT). U.S. gold futures GCcv1 for December delivery settled 0.5% higher at $3,448.6.

U.S. Personal Consumption Expenditures, the Fed's preferred inflation gauge, is due on Friday and could offer cues on the interest-rate path. Economists polled by Reuters expect the PCE price index USPCEY=ECI to rise 2.6% in July, matching June's rise.

"If (the PCE data) is a miss showing stronger inflation, that might begin to call into question whether the Fed's going to be able to cut interest rates in September," said Jim Wyckoff, senior analyst at Kitco Metals.

"I suspect it would take an awfully strong inflation number to preempt the Fed from cutting rates in September."

Gold, a zero-yield asset, thrives in a low-interest rate environment and is considered a hedge against uncertainty.

Markets are anticipating an over 87% chance of a 25-basis-point rate cut at the Fed's policy meeting next month, according to CME FedWatch Tool .

Trump said earlier this week he was removing Federal Reserve Governor Lisa Cook from her position on the Fed's board of directors. Meanwhile, Cook's lawyer said she would file a lawsuit to prevent Trump from firing her, kicking off a potentially protracted legal fight.

Gold prices rose to a more than two-week high on Tuesday, following Trump's attempt to fire Cook.

Trump threatening to fire a Fed governor is "really negative for the economy, interest rates and the dollar," said Jeffrey Christian, managing partner of CPM Group.

"Gold is staying in a relatively narrow range because people are trying to ascertain what it all means for the economy."

Elsewhere, spot silver XAG= fell 0.1% to $38.57 per ounce, platinum XPT= slipped 0.2% to $1,345.66, and palladium XPD= dropped 0.3% to $1,091.01.