Gold holds ground on US rate-cut expectations

Gold prices held steady in early Asian hours on Monday, buoyed by data that showed inflation in the U.S. subsided, boosting hopes that the Federal Reserve will start cutting interest rates this year.

FUNDAMENTALS

* Spot gold was little changed at $2,323.74 per ounce, as of 0022 GMT. Prices jumped more than 4% in the second quarter.

* U.S. gold futures were down 0.3% at $2,333.

* Data on Friday showed that U.S. prices were unchanged in May while consumer spending rose moderately, a trend that could draw the Fed closer to start cutting rates this year.

* Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

* Traders are now pricing in a 63% chance of a first rate cut in September, according to the CME FedWatch tool.

* Last week, India's physical gold demand remained lacklustre due to higher prices, while some buyers postponing purchases, hoping the government would cut import duty in the upcoming budget, also weighed on sentiment.

* Top consumer China's manufacturing activity fell for a second month in June while services activity slowed, an official survey showed on Sunday, keeping alive calls for further stimulus.

* Spot silver fell 0.3% to $29.05 per ounce, platinum was flat at $993.60 and palladium inched up 0.2% to $974.50.

DATA/EVENTS (GMT) 0145 China Caixin Mfg PMI Final 0600 UK Nationwide house price MM, YY 0750 France HCOB Manufacturing PMI 0755 Germany HCOB Manufacturing PMI 0800 EU HCOB Mfg Final PMI 0830 UK S&P Global Mfg PMI 1200 Germany CPI, HICP Prelim YY 1345 US S&P Global Mfg PMI Final 1400 US ISM Manufacturing PMI.