U.S. CPI data due on Wednesday
Gold hits over 1week high earlier
Silver down more than 1

Aug 13 Reuters Gold prices eased on Tuesday as profittaking kicked in after bullion hit a more than oneweek high, while market players awaited key U.S. inflation data that could provide further insight into the Federal Reserve39;s next policy decision.

Spot gold fell 0.4 to 2,461.71 per ounce by 0616 GMT, after hitting its highest level since Aug. 2 earlier in the session. Prices rose more than 1 in the previous session.

U.S. gold futures were down 0.1 to 2,502.00.

Gold had a solid start to the week though it eased moderately on some gentle profittaking, said Tim Waterer, chief market analyst, KCM Trade.

Prices will benefit if the U.S. inflation data comes in on the softer side of the ledger, which would reignite hopes of an aggressive rate cut from the Fed in September.

Traders are waiting for July U.S. producer price figures due later in the day and consumer price CPI numbers on Wednesday to gauge the chance of outsized rate cuts. The CPI data is expected to show that headline and core prices rose 0.2 monthonmonth.

Markets see about 50 chance of a 50 basis point rate cut in September, according to the CME FedWatch Tool. A low interest rate environment tends to boost nonyielding bullion39;s appeal.

If markets become more optimistic of a 50 bp cut coming to fruition, this could propel the gold price to make a run at the 2,500 level, Waterer said.

On the geopolitical…