Aug 15 (Reuters) - Gold was subdued on Friday and was

heading for a weekly fall, as hotter than expected U.S.

inflation data dented expectations for a super sized 50 basis

point U.S. interest rate cut in September.

FUNDAMENTALS

* Spot gold was down 0.1% at $3,333.58 per ounce, as

of 0120 GMT. Bullion has fallen 1.9% for the week. U.S. gold

futures for December delivery eased 0.1% to $3,378.90.

* The Labor Department reported the U.S. producer price

index (PPI) rose 3.3% year-on-year in July, beating forecasts of

2.5% while weekly jobless claims were lower than expected at

224,000 versus 228,000 forecast.

* This comes after data on Tuesday showed that U.S. consumer

prices increased marginally in July, increasing chances of a

Federal Reserve rate cut next month.

* While Thursday's hot PPI data did not dent chances of a

Fed rate cut in September, it hurt the case for the Fed to

resume cutting rates with a 50 bp reduction.

* St. Louis Fed President Alberto Musalem on Thursday said a

half-point rate cut at the Fed's September meeting is not

warranted, a day after Treasury Secretary Scott Bessent said it

was possible.

* Non-yielding gold thrives in a low-interest-rate

environment.

* Investors will next focus on whether Fed Chair Jerome

Powell offers any fresh clues on policy at the U.S. central

bank's annual economic policy symposium in Jackson Hole,

Wyoming, next week.

* On the geopolitical front, investors are tempering

expectations that Friday's summit between Donald Trump and

Vladimir Putin will deliver a significant breakthrough on the

war in Ukraine despite some hopeful sign.

* SPDR Gold Trust, the world's largest gold-backed

exchange-traded fund, said its holdings fell 0.30% to 961.35

metric tons on Thursday from 964.22 tons on Wednesday.

* Elsewhere, spot silver rose 0.2% to $37.89 per

ounce, platinum fell 0.3% to $1,351.78 and palladium

slipped 0.4% to $1,140.69.

DATA/EVENTS (GMT)

0200 China Urban Investment (YTD)YY, Retail Sales YY

July

0200 China Unemp Rate Urban Area July

1000 EU Reserve Assets Total July

1230 US Import Prices YY, Retail Sales MM July

1315 US Industrial Production MM July

1400 US U Mich Sentiment Prelim August