PRECIOUS-Trump policy uncertainty lifts gold; US inflation data in focus

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US PPI report due at 1330 GMT; CPI data due on Wednesday

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Speculators raise net long positions by 12,116 contracts

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Gold has assumed its mantle as inflation hedge - analyst

(Adds graphic and updates with mid-session trading)

By Rahul Paswan

Jan 14 (Reuters) - Gold prices gained on Tuesday, buoyed by uncertainty surrounding U.S. President-elect Donald Trump's policy plans and investor positioning ahead of crucial U.S. inflation data that will offer further insights into the Federal Reserve's policy path.

Spot gold rose 0.5% to $2,674.26 per ounce by 0502 GMT. U.S. gold futures gained 0.4% to $2,689.10.

Gold prices fell about 1% on Monday as robust U.S. jobs data released last week boosted the dollar. A stronger dollar makes gold more expensive for buyers using other currencies.

The jobs report also reinforced the Fed's cautious stance on rate cuts this year, while concerns grew that Trump's tariff plans could fuel inflation.

"The reason why gold is faring better during the current period of U.S. dollar strength than it historically has can be ascribed to the inflationary concerns of investors... gold has assumed its mantle as an inflation hedge," said Tim Waterer, chief market analyst at KCM Trade.

U.S. consumers' outlook on the expected path of inflation was mixed last month, a survey by the New York Fed showed.

Bullion is used as a hedge against inflation, although higher interest rates reduce the non-yielding asset's appeal.

Investors now await the producer price index (PPI) report later in the day and the U.S. consumer price index (CPI) data on Wednesday for further insights into the economy and the Fed's 2025 policy trajectory. Several Fed officials are also due to speak this week.

"If we happen to see softer inflation figures this week, that would likely see the U.S. dollar come under selling pressure, which could boost gold as it becomes less expensive to buy," Waterer said.

COMEX gold speculators raised net long positions by 12,116 contracts to 194,499 in the week to Jan. 7, data showed on Monday.

Spot silver gained 0.3% to $29.68 per ounce, palladium climbed 0.6% to $959.70 and platinum rose 0.5% to $943.25.

(Reporting by Rahul Paswan in Bengaluru; Editing by Sumana Nandy and Subhranshu Sahu)