PRECIOUS-Gold slides to two-week low after U.S. inflation data

* Gold down 1.5 pct this week, snapping two weeks of gains
    * Biggest gold ETF holdings drop 3.3 tonnes on Thursday
    * Coming up: Fed meeting Sept. 20-21, statement on Wednesday
    * GRAPHIC-2016 asset returns:

 (Updates prices; adds comment, second byline, NEW YORK
    By Marcy Nicholson and Jan Harvey
    NEW YORK/LONDON, Sept 16 (Reuters) - Gold fell to a two-week
low on Friday after data showing faster-than-expected growth in
U.S. consumer prices last month helped support the case for the
Federal Reserve to raise interest rates later this year and the
dollar jumped.
    Inflation is a key factor the U.S. central bank considers
when deciding monetary policy. 
    While the prospect of a hike at the Fed's policy meeting
next week remains remote, a Reuters poll of 100 economists
indicated a 70 percent chance of a December rise. 
    Spot gold slid to its lowest since Sept. 1 in after
the data at $1,306.26 an ounce, and was down 0.4 percent at
$1,308.33 by 2:31 p.m EDT (1831 GMT). U.S. gold futures 
for December delivery settled down 0.6 percent at $1,310.20. 
    The precious metal is also on track for its first weekly
loss in three weeks, down 1.5 percent.
    "The U.S. CPI data was positive for the dollar and this has
pushed the gold price lower," ThinkMarkets analyst Naeem Aslam
    "We are trading close enough to a technical support level of
$1,300, and if we break this level, it will be a bearish signal
for the precious metal."
    Gold is highly sensitive to rising U.S. interest rates,
which increase the opportunity cost of holding non-yielding
bullion, while boosting the dollar, in which it is priced.
    The dollar gained 0.8 percent against a basket of
major currencies. 
    "Dollar strength is the headwind," said Rob Haworth, senior
investment strategist for U.S. Bank Wealth management in
    "Today you've got enough in the inflation data to increase
odds of a Fed rate increase."
    The U.S. and Japanese central banks hold monetary policy
meetings on Sept. 20-21. The Fed is scheduled to release a
statement at 2 p.m. EDT (1800 GMT) on Wednesday.
    Investment appetite was soft, with holdings of the world's
largest gold-backed exchange-traded fund, SPDR Gold Shares
, falling 3.3 tonnes on Thursday. 
    Demand for gold in India remained lackluster this week as
higher prices hampered consumer purchases, though discounts
narrowed due to a correction in the spot rate. 
    Platinum fell by as much as 2.5 percent to a
2-1/2-month low at $1,005 an ounce and the white metal, used in
jewelry and autocatalysts, is set to fall for a seventh straight
week for the first time since 2013.
    Palladium was up 2.4 percent at $670.40 an ounce
while silver was down 0.8 percent at $18.80.    

 (Additional reporting by Swati Verma and Nallur Sethuraman in
Bengaluru; Editing by Meredith Mazzilli)