PRECIOUS-Gold steady as inflation data sparks caution over Fed rate outlook

* The longer-term bullish trend for gold remains intact - analyst * Mexico warns Trump tariffs would kill 400,000 U.S. jobs * Markets see 68.2% chance of rate cut in December (Updates with mid-session trading) By Daksh Grover Nov 28 (Reuters) - Gold prices held steady on Thursday as investors assessed a wave of economic data indicating persistent U.S. inflation, hinting that the Federal Reserve may proceed cautiously with further interest rate cuts. Spot gold XAU= held its ground at $2,637.78 per ounce, as of 0739 GMT. U.S. gold futures GCv1 edged 0.1% lower to $2,637.30. The market is focusing on the Fed's rate cuts, with the latest core Personal Consumption Expenditures (PCE) data suggesting slowing inflation, leading to expectations that the Fed's policy next year might be less dovish than previously projected, said Kelvin Wong, OANDA's senior market analyst for Asia Pacific. The Fed's struggle to bring inflation back to its 2% target, combined with the possibility of higher tariffs under the upcoming Trump administration may constrain the central bank's ability to implement rate cuts next year. Markets now see a 68.2% chance of a quarter-point rate cut in December, as per the CME group's FedWatch tool. Elsewhere, Mexican President Claudia Sheinbaum warned of retaliation if Trump enforces a 25% tariff, citing potential U.S. job losses and higher consumer prices. Gold is regarded as a safe-haven investment during periods of economic or geopolitical instability, including trade wars. Trading is expected to be thin with U.S. markets closed on Thursday for the Thanksgiving holiday. In the short term, particularly over the next few days to two weeks, gold could come under further pressure, Wong said, adding the longer-term bullish trend for gold, however, remains intact. SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, said its holdings fell 0.10% to 878.55 metric tons on Wednesday. GOL/ETF Spot silver XAG= fell 0.8% to $29.84 per ounce, platinum XPT= edged 0.1% higher to $928.10 and palladium XPD= added 0.6% to $978.05. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Spot gold price in USD per oz https://reut.rs/49c2tj9 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Daksh Grover in Bengaluru; Editing by Rashmi Aich, Eileen Soreng and Sherry Jacob-Phillips) (([email protected];))