*

China to resume buying bullion once prices ease - analysts

*

US CPI data due out on Wednesday

*

US Federal Open Market Committee meeting starts on Tuesday

(Updates prices and graphic as of 0558 GMT)

By Sherin Elizabeth Varghese

June 11 (Reuters) - Gold prices fell on Tuesday with

investors awaiting a key U.S. inflation reading and the Federal

Reserve's policy announcement for cues on when the central bank

will start cutting interest rates.

Spot gold was down 0.5% at $2,299.68 per ounce, as of

0558 GMT. U.S. gold futures fell 0.4% to $2,316.70.

"I suspect the Fed's hands are tied following the strong

payrolls report, as it likely doesn't enable them to signal the

September cut that traders desperately want to hear. And that

could see gold take another dent or two amid rising yields and

the U.S. dollar," said City Index senior analyst Matt Simpson.

The May consumer price index (CPI) inflation report due on

Wednesday will be the next major data point along with the Fed

concluding its two-day meeting on the same day.

"The fact that we'll see inflation data just hours ahead of

the Fed's interest rate decision means we might see a

last-minute panic and elevated levels of volatility should

inflation come in hot," Simpson said.

Updated economic projections from Fed officials this week

are expected to show fewer interest rate cuts than policymakers

anticipated three months ago amid unexpectedly sturdy inflation.

The strong U.S. jobs data and reports that China's central

bank was holding off gold purchases sent bullion tumbling about

3.5%, or $83, on Friday in its biggest daily drop since November

2020.

China, the biggest official sector buyer of gold, is

expected to resume its bullion shopping spree once prices ease

from the record highs hit in May.

Among other metals, spot silver fell 2.2% to $29.13

per ounce, platinum was down 0.9% at $958.55 and

palladium lost 1% to $895.13.

"Fundamentals are constructive in the medium and long-term

as a plethora of supply challenges and healthy demand from the

auto and new-energy sectors will keep the platinum market

structurally undersupplied," analysts at ANZ wrote in a note.