* U.S., Iran launch fresh strikes on each other

* May U.S. Producer Price Index data due at 1230 GMT

(Updates prices as of 0429 GMT)

By Pablo Sinha

June 11 (Reuters) - Gold prices steadied after hitting a

six-month low on Thursday, as investors awaited a key U.S.

inflation report that could shed more light on the Federal

Reserve's policy outlook.

Spot gold rose 0.1% to $4,077.39 per ounce by 0429

GMT, after hitting its lowest since November 21 at $4,022.09

earlier in the day. U.S. gold futures for August

delivery were down 0.8% at $4,098.90.

"Bearish momentum had taken hold of gold, and traders are

simply derisking at this point. But with prices hurtling towards

$4,000, it's an obvious level of support that could prompt bears

to book a quick profit or tempt battered bulls from the

sideline," said Matt Simpson, a senior analyst at StoneX.

"The U.S. dollar index failed to gain much ground following

Wednesday's CPI report. So, unless there are any nasty surprises

in PPI - gold could be due a technical bounce over the near

term."

Data showed that U.S. consumer inflation increased at its

fastest pace in three years in May, boosted by surging prices

for energy products amid the Middle East conflict.

Markets now await the May U.S. Producer Price Index data,

due later in the day, to further assess the Federal Reserve's

monetary policy stance.

Traders are now pricing in a more than 70% chance of a U.S.

rate hike by December, according to the CME FedWatch tool.

The United States began a fresh round of strikes against

multiple targets overnight in Iran, the U.S. military said on

Wednesday, hours after President Donald Trump vowed new attacks

if no peace deal is secured.

Oil prices climbed more than $2 on Thursday, as Iran

declared the closure of the Strait of Hormuz following the U.S.

strikes.

Elevated crude oil prices can accelerate inflation, and

while gold is viewed as a hedge against inflation, higher

interest rates tend to weigh on the non-yielding metal.

Spot silver fell 0.1% to $63.64 per ounce, platinum

was steady at $1,663.80, and palladium climbed

2.3% to $1,241.77.

(Reporting by Pablo Sinha in Bengaluru; Editing by Subhranshu

Sahu)