PRECIOUS-Gold extends gains as rate cut bets strengthen after US economic data

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U.S. consumer prices rise slightly above expectations in September

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U.S. weekly jobless claims surge

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Traders see an 88% chance of a 25 bp cut in November

(Adds graphic and updates prices as of 1524 GMT)

By Anushree Mukherjee

Oct 10 (Reuters) - Gold prices extended gains on Thursday after traders added to bets that the Federal Reserve will deliver an interest-rate cut next month following the latest U.S. economic data.

Spot gold was up 0.6% at $2,622.69 per ounce as of 11:24 a.m. ET (1524 GMT)on track to snap a six-session losing streak. U.S. gold futures edged 0.5% higher to $2,639.90.

U.S. consumer prices rose slightly more than expected in September, but the annual increase in inflation was the smallest in more than 3-1/2 years. Another report showed that weekly jobless claims rose to 258,000 for the week ending Oct. 5, versus estimates of 230,000.

"The CPI report didn't bring much of a surprise and the jobs numbers show a trend of weakening, which puts the notion that the track to cut rates, helping gold. Last few days, saw cooling in gold's rally, so it is in a good position to go back up," said Alex Ebkarian, chief operating officer at Allegiance Gold.

Markets now see an 88% likelihood of a 25-basis-point cut from the Fed next month versus 76% before the data, according to the CME FedWatch tool.

Zero-yield bullion is a preferred investment amid lower interest rates.

Investors' focus will shift to U.S. Producer Price Index data on Friday for additional insights on rate cuts.

Heightened geopolitical events and strong demand led by central banks are the other positive catalysts for gold, Ebkarian added.

In the Middle East, Israel pressed its assault on Hezbollah and told Lebanese civilians not to return to homes in the south.

Spot silver rose 1.2% to $30.87 per ounce.

"Easing monetary policy and an undersupplied market will likely attract investor interest, with silver remaining an inexpensive alternative to gold," ANZ said in a note.

Platinum added 2.5% to $968.15, and palladium was up 1.9% to $1,059.77.

(Reporting by Anushree Mukherjee in Bengaluru; Editing by Tasim Zahid)