PRECIOUS-Gold slides as dollar firms on bets for 'transitory' inflation


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    * Gold slips below $1,900/oz 
    * U.S. CPI rises 0.6% in May
    * Palladium on track for weekly decline

 (Adds comment, updates prices)
    By Arundhati Sarkar
    June 11 (Reuters) - Gold prices slipped on Friday, pressured
by a stronger dollar, with some investors betting on rising U.S.
consumer prices being temporary and not affecting the Federal
Reserve's current monetary stimulus.
    Spot gold  XAU=  had fallen 0.8% to $1,883.16 per ounce by
1304 GMT. U.S. gold futures  GCv1  were 0.6% lower at $1,885.50.
    Inflation has come a little bit on the higher side versus
expectations, "but the view remains that these inflation levels
will level off from now on," UBS analyst Giovanni Staunovo said,
adding gold is having difficulties sustaining above $1,900.
    As long as it has difficulties to stay above that level
"there will be some investors using that to sell gold or build
up short positions," Staunovo added.
    Data showed U.S. consumer prices rose solidly in May, while
jobless claims dropped to their lowest in nearly 15 months last
    The dollar index  .DXY  rose 0.3%, reducing gold's appeal
for investors holding other currencies.  USD/ 
    Meanwhile, the European Central Bank on Thursday kept its
monetary policy unchanged and pledged a steady flow of stimulus
over the summer.*:nL5N2NR47O
    Focus now shifts to Fed's June 15-16 policy meeting. A
significant number of Fed watchers according to a Reuters poll
have said the central bank would wait until later in the year
before announcing a taper.*:nL3N2NR3I0
    "With next week's FOMC unlikely to trigger any increased
taper focus, the attention will instead turn to Jackson Hole in
late August for any announcement about a change in direction,"
said Ole Hansen, head of commodity strategy at Saxo Bank in a
    Silver  XAG=  rose 0.6% to $28.14 per ounce, while platinum
 XPT=  fell marginally to $1,150.69.
    Palladium  XPD=  was up 0.4% at $2,786.69, but stayed on
track for a weekly decline.

 (Reporting by Arundhati Sarkar and Nishara Karuvalli Pathikkal
in Bengaluru; Editing by Elaine Hardcastle, Kirsten Donovan)
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