PRECIOUS-Gold retreats as dollar, yields firm on higher US inflation data

* US producer price index for Feb increased more than expected * Traders see 60% chance for June rate cut * Silver eased off more than three-month high (Adds graphic and updates as of 1832 GMT) By Anjana Anil March 14 (Reuters) - Gold slid on Thursday after a larger-than-expected rise in February's U.S. producer price index (PPI) cooled expectations of early rate cuts by the Federal Reserve, boosting Treasury yields and the dollar. Spot gold XAU= was down 0.6% at $2,161.39 per ounce as of 2:32 p.m. EDT (1832 GMT), moving away from a record peak of $2,194.99 hit on March 8. U.S. gold futures GCcv1 settled 0.6% lower at $2,167.5. The dollar .DXY gained 0.6% against its rivals, making gold less attractive for other currency holders, while benchmark U.S. 10-year note yields US10YT=RR rose to a more than one-week high. US/ USD/ "I expect to see continued pressure (on gold), with all of the data showing the U.S. economy is strong, the labor market still strong," said Chris Gaffney, president of world markets at EverBank. "It really makes investors question just how quickly the Fed's going to decide to start cutting (rates)." U.S. producer prices increased more than expected in February amid a surge in the cost of goods like gasoline and food, which could fan fears that inflation is picking up again. Higher inflation adds pressure on the Fed to keep interest rates elevated, weighing on non-yielding assets such as gold. However, traders continue to bet on interest rate cuts in June, pricing in about a 60% chance, compared with 72% before the CPI data earlier this week, according to the CME Group's FedWatch Tool. The Fed is expected to hold rates steady at its policy meeting next week, but the focus will be on the "dot plot" projections. "Gold is an uncertainty hedge, an inflation hedge with higher inflation and more uncertainty. I think that provides a good floor for precious metals pricing," Gaffney added. Spot platinum XPT= fell 0.8% to $930.95 per ounce, while palladium XPD= rose 0.8% to $1,067.79. Silver XAG= slipped 0.8% to $24.83, after hitting a more than three-month high earlier in the session. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Spot gold price in USD per oz https://reut.rs/49YPnFG ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Anjana Anil in Bengaluru; Editing by Jan Harvey, Shailesh Kuber and Shweta Agarwal) (([email protected];))