Gold struggles for momentum as traders await key US inflation data

Gold struggled for momentum in early Asian trading on Friday, as traders awaited key U.S. inflation numbers due later in the day after a slew of strong data prints and hawkish comments from Federal Reserve officials raised bets of more rate hikes.

FUNDAMENTALS

* Spot gold was flat at $1,908.33 per ounce by 0122 GMT. It hit its lowest since mid-March at $1,892.82 on Thursday.

* U.S. gold futures fell 0.1% to $1,916.40.

* The dollar index was steady near a two-week high hit in the previous session, making gold expensive for holders of other currencies. [USD/]

* U.S. data on Thursday showed a resilient labour market, while gross domestic product for the first quarter was revised upward, making a strong case for the Fed to raise rates to bring down inflation.

* While Fed Chair Jerome Powell indicated that the central bank was likely to raise rates at least twice more by year-end, Atlanta Fed Bank President Raphael Bostic said it was clear that inflation had fallen.

* Investors now see an 89% chance of a 25-basis point hike in July, according to CME's Fedwatch tool. High interest rates discourage investment in non-yielding gold.

* Benchmark Treasury yields surged on Thursday. A rise in treasury yields makes gold less attractive by raising the opportunity cost of holding it. [US/]

* Market participants are awaiting personal consumption expenditures (PCE) data for May, with core PCE expected to be 4.7% on a year-on-year basis, well above the Fed's 2% target.

* Spot silver rose 0.1% to $22.56 per ounce, platinum was up 0.7% at $900.52, and palladium rose 7% to $1,237.31.