PRECIOUS-Gold rebounds on bargain-hunting, softer US inflation data

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US consumer price index increased 0.2% last month

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Markets expect Fed to resume policy easing in September

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US and China on Monday agreed to pause trade war

(Adds comment, updates for AMERS morning session)

By Sarah Qureshi

May 13 (Reuters) - Gold prices rose on Tuesday on bargain-hunting after a sharp loss in the previous day, while softer-than-expected inflation data from the U.S. also lent support.

Spot gold rose 0.2% to $3,241.16 an ounce as of 0938 ET (13:38 GMT), after falling as low as $3,207.30 on Monday. U.S. gold futures were up 0.6% at $3,245.50.

"We had a big correction in gold on Monday on the news that there is a deal made between the U.S. and China," Bart Melek, head of commodity strategies at TD Securities, said.

"However, tariffs (on China) are still 30%, which is quite negative for the economy."

The U.S. and China on Monday said they would pause their tariffs for 90 days. Following the talks in Geneva over the weekend, the U.S. said it will cut tariffs on Chinese imports to 30% from 145% while China said it would cut duties on U.S. imports to 10% from 125%.

Bullion had shattered multiple record highs in 2025, owing to concerns over economic slowdown following U.S. President Donald Trump's sweeping tariffs, strong central bank buying, geopolitical tensions and increased flow into gold-backed exchange-traded funds.

Elsewhere, U.S. consumer price index increased 0.2% last month, the Labor Department's Bureau of Labor Statistics said on Tuesday. Economists polled by Reuters had forecast the CPI would rise 0.3%.

"The report does lean slightly friendly for the precious metals markets because it's not a problematic inflation report that would give the Federal Reserve pause on cutting interest rates," Jim Wyckoff, senior analyst at Kitco Metals, wrote in a note.

Financial markets expect the central bank to resume its policy easing in September.

Lower interest rates increase non-yielding bullion's appeal.

Spot silver added 0.1% to $32.62 an ounce, platinum climbed 1.4% to $989.95 and palladium gained 0.2% to $947.24. (Reporting by Sarah Qureshi and Anjana Anil in Bengaluru; Editing by Sahal Muhammed)