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PRECIOUS-Gold treads water as U.S. inflation data looms

* U.S. consumer price data due at 1230 GMT

* Softer inflation data could hurt gold- analyst (Adds Commerzbank comment and updates prices)

Sept 14 (Reuters) - Gold prices were subdued on Tuesday with investors setting their sights on U.S. consumer price data that could offer clues on when the Federal Reserve decides to temper its economic support.

Spot gold edged 0.3% lower to $1,787.56 per ounce by 1135 GMT, U.S. gold futures fell 0.3% to $1,788.20.

U.S. consumer price data is due at 1230 GMT. Economists expect core CPI, an index that strips out volatile energy and food prices, to have risen 0.3% in August from the prior month.

“There’s quite a lot to be positive about for gold with elevated inflation and negative real rates but the Fed has cast our eyes more to the point in time where rates will rise and they will start to taper,” independent analyst Ross Norman said.

Higher interest rates raise the opportunity cost of holding gold, which pays no interest.

Norman also noted that U.S. consumer prices may have softened last month, dealing a blow to investors who view gold as an inflation hedge.

Inflation data comes on the heels of comments from several Fed officials that the central bank should begin tapering asset purchases this year.

“Today’s data is at least likely to increase the probability of the Fed announcing a reduction in its bond purchases before the year is out,” Commerzbank analysts said in a note, adding however that the central bank was unlikely to being tapering in its policy meet next week.

Bullion traders also failed to take advantage of a subdued dollar index which decreases its cost to holders in other currencies.

Among other metals, palladium slipped 2.9% to $2,026.83 and platinum fell 1.6% to $945.64.

“Supply chain weakness effecting particularly chips and car manufacturing is having a depressing effect on the platinum group metals,” Norman said, adding that while the supply disruptions persist, prices were likely to be pressured.

Silver fell 0.5% to $23.59 an ounce. (Reporting by Nakul Iyer in Bengaluru; editing by Philippa Fletcher and Chizu Nomiyama)

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