PRECIOUS-Gold prices tread water ahead of US inflation data

* Bullion up 2.5% so far this month * Nornickel expects global deficit for palladium in 2024 * Silver heads for biggest monthly gain since July 2020 (Updates prices and graphic as of 1131 GMT) By Daksh Grover May 31 (Reuters) - Gold prices were flat on Friday as investors awaited the crucial inflation report which can significantly influence the outlook on U.S. interest rates, although bullion was heading for its fourth straight monthly gain. Spot gold XAU= was almost unchanged at $2,342.68 per ounce as of 1131 GMT. Bullion prices are up 0.4% this week and 2.5% so far in the month. U.S. gold futures GCcv1 was flat at $2,340.20. "Gold has ignored all normal economic indicators. It's dancing to a different beat or rhythm. The reason for that is being driven by speculative flows out of China," said independent analyst Ross Norman. Investors' focus now shifts to the Personal Consumption Expenditures (PCE) price index, the Fed's preferred measure of inflation, due at 1230 GMT. The U.S. core Personal Consumption Expenditures (PCE) index for April is forecasted to increase by 0.3% month-on-month and 2.8% year-on-year. Dallas Federal Reserve Bank President Lorie Logan said on Thursday she believes inflation is still heading to the Fed's 2% target. A hawkish comment from the Fed official heightened expectations for future rate cuts. FEDWATCH While gold is often considered a safeguard against inflation, higher rates increase the opportunity cost of holding the non-yielding asset. On the physical front, high prices curbed retail appetite for physical gold in most Asian hubs this week, while dealers in India were forced to offer discounts for a fourth consecutive week. GOL/AS Spot silver XAG= gained 0.3% to $31.28 per ounce but was set for its biggest monthly gain since July 2020. "Silver has broadly echoed the moves in gold, but it has held up somewhat better over the past 1-1.5 weeks. Both metals (gold and silver) have pulled back, but the reversal in gold has been more pronounced," said Ilya Spivak, head of global macro at Tastylive Platinum XPT= was up 1.2% to $1,036.85, and palladium XPD= shed 0.2% to $946.36. Nornickel, the world's largest producer of palladium GMKN.MM , said it expected a global deficit of 0.9 million ounces for palladium in 2024. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Spot gold price in USD per oz https://reut.rs/3KpLUok ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Daksh Grover in Bengaluru; Editing by Ravi Prakash Kumar) (([email protected];))