(Rewrites after US CPI data)

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U.S. consumer prices rise moderately in May

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Trump says U.S.-China deal done

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China to supply rare earths, U.S. to allow Chinese

students

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U.S. PPI due on Thursday

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Platinum gains nearly 4%

By Ashitha Shivaprasad

June 11 (Reuters) - Gold prices rose on Wednesday,

helped by cooler-than-expected inflation data that strengthened

investors' conviction the Federal Reserve will start cutting

interest rates by September.

Spot gold was up 0.5% to $3,337.49 an ounce as of

0909 ET (1309 GMT) after rising as much as 1% earlier in the

session. U.S. gold futures rose 0.5% to $3,358.80.

Data showed the Consumer Price Index increased 0.1% last

month after rising 0.2% in April. In the 12 months through May,

the CPI advanced 2.4% after gaining 2.3% in April.

Economists polled by Reuters had forecast CPI climbing 0.2%

and increasing 2.5% year-on-year.

"The surprise low print in core CPI has goosed the entire

precious metals complex higher as yields and the dollar fall.

The hope is that it will bring a Fed cut that much sooner," said

Tai Wong, an independent metals trader.

Traders are currently pricing in a 68% chance of an interest

rate cut in September by the U.S. central bank, according to CME

FedWatch tool.

On the trade front, U.S. President Donald Trump said the

U.S. deal with China is done, with Beijing to supply magnets and

rare earth minerals, while the U.S. will allow Chinese students

at its colleges and universities. Trump said the deal is subject

to final approval by him and President Xi Jinping.

The market's focus is now on the U.S. Producer Price Index

data, due on Thursday before the Fed's June 17-18 meeting.

"The market will want to see gold and silver take out recent

highs, $3,403 and $36.90 respectively, as a signal to charge

higher. If we don't rally strongly on surprisingly good data,

then it may signal a short-term correction," Wong added.

Spot silver eased 0.7% to $36.32 per ounce. Platinum

rose 3.8% to $1,268.12, its highest level since 2021.

Palladium added 1.1% to $1,072.25.