PRECIOUS-Gold on track for weekly drop as traders temper US rate-cut hopes

March 15 (Reuters) - Gold prices were headed on Friday for their first weekly fall in four as surprisingly hot U.S. inflation readings suggested that the Federal Reserve could reduce the number of rate cuts this year and may push the first cut beyond June. FUNDAMENTALS * Spot gold XAU= was up 0.1% at $2,162.66 per ounce, as of 0144 GMT, but on track to post a weekly fall of more than 0.5%, its first since mid-February. * U.S. gold futures GCcv1 were steady at $2,167.00. * U.S. producer prices increased more than expected in February amid a surge in the cost of goods such as gasoline and food, which could fan fears that inflation is picking up again. * Higher inflation adds pressure on the U.S. Fed to keep interest rates elevated, weighing on non-yielding assets such as gold. * A reading on consumer inflation earlier this week also showed some stickiness in inflation. * Other data showed U.S. retail sales rebounded last month, but were below analyst estimates, as households grapple with inflation and higher borrowing costs, while fewer people sought unemployment claims. * Traders have pared back the chances of a rate cut at the U.S. Fed's June meeting to 61%, from about 75% last Friday, according to LSEG's rate probability app. For 2024, market sees about three rate cuts, down from between three to four last Friday. * The dollar index .DXY rose 0.7% this week so far, on pace for its largest weekly gain since mid-January. * Investors also kept a tab of brewing geopolitical risks between Russia and Ukraine as a senior Ukrainian intelligence official said two border regions have turned into "active combat zones". * Spot platinum XPT= fell 0.2% to $926.10 per ounce, palladium XPD= dropped 1% to $1,058.53, while silver XAG= was up 0.4% at $24.93. All three metals were poised to clock a weekly gain. DATA/EVENTS (GMT) 0745 France CPI (EU Norm) Final MM, YY Feb 1100 EU Reserve Assets Total Feb 1230 US Import Prices YY Feb 1315 US Industrial Production MM Feb 1400 US U Mich Sentiment Prelim March (Reporting by Harshit Verma in Bengaluru; Editing by Sherry Jacob-Phillips) (([email protected];))