SINGAPORE, Sept 17 (Reuters) - Gold retained overnight gains from its biggest jump in nearly a month on Thursday as sluggish U.S. inflation data eased fears the Federal Reserve would hike interest rates later this session.
FUNDAMENTALS
* Spot gold XAU= was holding steady at $1,119.40 an ounce at 0045 GMT, near a one-week high of $1,124.30 reached in the previous session. The metal gained 1.3 percent on Wednesday, its biggest daily jump since Aug. 20.
* U.S. gold GCcv1 also held firm at $1,119.30, following a 1.5-percent gain overnight.
* Bullion got a boost as data on Wednesday showed U.S. consumer prices unexpectedly fell in August, pointing to tame inflation that complicates the Fed's decision whether to hike interest rates. ID:nL1N11M0RR
* Signs of a disinflationary trend reasserting itself are in stark contrast with a fairly healthy economy and a rapidly tightening labour market, and highlight the dilemma Fed officials face as they contemplate raising interest rates for the first time in nearly a decade.
* The U.S. central bank kicked off a two-day policy meeting on Wednesday, with a decision on interest rates expected at 1800 GMT Thursday.
* Expectations that the Fed would hike rates at this week's meeting had already been lowered due to recent concerns over slowing economic growth in China and volatility in financial markets.
* In a Reuters poll of 80 economists, 45 said the Fed would keep its benchmark interest rate between zero and 0.25 percent, while 35 expected a hike. ID:nL4N11L32T
* The uncertainty over the timing of a rate hike has weighed on gold all year, sending it down over 6 percent. Higher rates could curb demand for non-interest-paying bullion.
* Softness in the dollar, following the inflation data, also supported gold prices.
* Among other precious metals, silver XAG= was holding firm at $14.88, following a 3.5-percent jump in the previous session, its biggest one-day jump since May. Platinum XPT= edged higher for a third straight session.
* For the top stories on metals and other news, click TOP/MTL or GOL
MARKET NEWS
* The dollar came under pressure in Asian trading on Thursday. USD/
DATA AHEAD (GMT)
1230 U.S. Current account Q2
1230 U.S. Housing starts Aug
1230 U.S. Building permits Aug
1230 U.S. Weekly jobless claims
1400 U.S. Philly Fed business index Sep
1800 Fed releases statement after policy meeting
1830 Fed Chair Janet Yellen holds news conference
PRICES AT 0045 GMT Metal
Last
Change Pct chg
Spot gold
1119.4
0.25
0.02 Spot silver
14.88
-0.01
-0.07 Spot platinum
970.7
2.46
0.25 Spot palladium
608.8
-0.2
-0.03 Comex gold
1119.3
0.3
0.03 Comex silver
14.88 -0.005
-0.03 Euro
1.1295
DXY
95.289
COMEX gold and silver contracts show the most active months