Feb 12 (Reuters) - Gold prices edged up early on Monday as the dollar eased a touch after last week's rally and investors waited for more data on U.S. inflation amid expectations of rising interest rates. FUNDAMENTALS * Spot gold was up 0.3 percent at $1,320.19 an ounce, as of 0111 GMT. Prices touched their lowest since Jan. 4 at $1,306.81 last week * Spot gold fell 1.2 percent last week, recording its second straight weekly loss. * U.S. gold futures were up 0.5 percent at $1,321.70 per ounce on Monday. * Asian share markets were struggling to find their footing on Monday as investors fretted about the risks from looming U.S. inflation data, although early gains on S&P futures offered a sliver of support. * The benchmark S&P 500 fell 5.2 percent last week, its biggest decline since January 2016. Ninety-six S&P 500 stocks were down 20 percent or more from their own one-year highs, according to Thomson Reuters data. * Investors will be watching for U.S. consumer price data on Wednesday given it was fears of faster inflation, and thus more aggressive rate rises, that triggered the global rout in the first place. * Inflation worries generally boost gold, which is seen as a safe haven against rising prices. But expectations that the Fed will raise interest rates to fight inflation make gold less attractive because it does not pay interest. * Last week, the dollar recorded its strongest week against the currency basket in nearly 15 months as some traders closed out dollar-bearish bets, while others favoured the dollar in a safe-haven move to exit over higher-returning but riskier currencies. * The dollar index , which measures the greenback against a basket of currencies, eased 0.2 percent to 90.291 after gaining 1.4 percent last week. * Hedge funds and money managers slashed their net long position in COMEX gold for the first time in eight weeks in the week to Feb. 6, and cut it in silver, U.S. Commodity Futures Trading Commission data showed on Friday. * Holdings of SPDR Gold Trust GLD, the world's largest gold-backed exchange-traded fund, fell 0.68 percent to 820.71 tonnes on Friday from 826.31 tonnes on Thursday. * Physical gold demand in Asia picked up towards the end of the week, as a pullback in prices spurred purchases ahead of the Lunar New Year in China and the wedding season in India. (Reporting by Nallur Sethuraman in Bengaluru; editing by Richard Pullin)
Our Standards: The Thomson Reuters Trust Principles.