March 27 (Reuters) - Futures for Canada's main stock

index inched higher on Wednesday, tracking an uptick in precious

metals prices, though weaker crude oil limited gains.

Futures on the S&P/TSX index were up 0.2% at 6:56

a.m. ET (1056 GMT).

Gold and silver prices crept higher with investors

exercising caution ahead of a crucial U.S. inflation report due

later in the week.

The February data for U.S. personal consumption expenditure

price index, the Federal Reserve's preferred inflation gauge, is

due on Friday, when the U.S. and Canadian markets would be

closed for the Good Friday holiday.

The data could offer clues on the timing for the Fed's first

interest rate cut, with traders widely expecting its first

reduction of 25 basis points in June.

But according to economists and analysts, the Bank of Canada

is likely to move ahead of the Fed on its first rate cut, as

tepid economic growth and cooling inflation are priming up

conditions to ease borrowing rates sooner.

Meanwhile, oil prices fell for a second day, dropping more

than 1%, after data showed a sharp rise in U.S. stockpiles and

signs that the OPEC+ producer group is unlikely to change its

output policy at a technical meeting next week.

Company-wise, brokerage BMO upgraded its rating on Lundin

Mining ( LUNMF ) to "outperform" from "market perform", while TD

Securities lifted its recommendation on Vermilion Energy ( VET )

to "buy" from "hold".

Canacol Energy ( CNNEF ) said it would discontinue dividend

payout as the oil producer focuses on addressing concerns

regarding debt obligations and liquidity.

The Toronto Stock Exchange's S&P/TSX composite index

ended lower on Tuesday, dragged by losses in

heavy-weight energy stocks.

COMMODITIES AT 6:56 a.m. ET

Gold futures: $2,200.8; +0.6%

US crude: $80.96; -0.8%

Brent crude: $85.52; -0.9%

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($1= C$1.3591)