Oct 14 (Reuters) - Gold prices drifted lower on Monday

as the U.S. dollar strengthened, while market participants

awaited fresh cues on the Federal Reserve's monetary policy

path.

FUNDAMENTALS

* Spot gold fell 0.4% to $2,646.75 per ounce by 0022

GMT after rising 1% in the previous session. U.S. gold futures

lost 0.5% to $2,663.90.

* The dollar index edged up 0.2%, making bullion less

attractive for other currency holders.

* Data on Friday showed that U.S. producer prices were

unchanged in September, pointing to a still-favorable inflation

outlook and supporting views that the Fed would cut interest

rates again next month.

* Traders see roughly 87% probability the Fed would cut

rates by 25 basis points at its November meeting, and a 13%

chance it will leave rates unchanged, according to CME's

FedWatch tool.

* Zero-yield bullion is a preferred investment amid lower

interest rates.

* Investors will also keep an eye on the U.S. retail sales

data due later this week for further cues on rate outlook.

* Elsewhere, the United States said on Sunday it will send

U.S. troops to Israel along with an advanced U.S. anti-missile

system, in a highly unusual deployment meant to bolster the

country's air defenses following missile attacks by Iran.

* Spot silver edged 1% lower to $31.21 per ounce.

Platinum fell 0.9% to $976.20 and palladium

slipped 2.1% to $1,045.87.

* Saturday's news conference by China's Finance Minister Lan

Foan reiterated Beijing's broad plans to revive the ailing

economy, with promises made on significant increases to

government debt and support for consumers and the property

sector.

* Japan's Mitsui & Co plans to re-enter global precious

metals trading to hedge client risk after a nine-year absence,

three sources with knowledge of the matter told Reuters.