PRECIOUS-Gold steady as markets focus on Trump-Xi meeting

(Rewrites for EMEA morning session)

* Markets monitor Trump-Xi meeting, Iran war in focus

* U.S. Producer Price Index posts largest gain in four years

* HSBC raises 2026 silver price forecast to $75/oz

By Noel John

May 14 (Reuters) - Gold was largely steady on Thursday, as investors focused on a meeting between U.S. President Donald Trump and his Chinese counterpart Xi Jinping, while digesting a rise in U.S. inflation driven by the increased energy costs linked to the Iran war.

Spot gold inched up 0.1% at $4,689.79 per ounce, as of 0931 GMT. U.S. gold futures for June delivery fell 0.2% at $4,696.20. China's Xi Jinping told Trump that trade talks were making progress at the start of a two-day summit on Thursday but that disagreement over Taiwan could damage relations and even lead to conflict.

"Gold is hovering around $4,700 as markets are still digesting U.S. inflation data. It is very clear that we are in a consolidation phase," said Swissquote analyst Carlo Alberto De Casa. Data on Wednesday showed that U.S. producer prices posted their biggest increase in four years in April, the latest sign of accelerating inflation. Data on Tuesday had shown U.S. annual consumer inflation posted its largest gain in three years.

Traders have largely priced out U.S. interest rate cuts this year due to rising energy prices, with markets anticipating a 29% chance of a hike by December, according to CME Group's FedWatch tool. The U.S. Senate approved Kevin Warsh as chair of the Federal Reserve as the U.S. central bank grapples with inflation that may make it hard to deliver the interest-rate cuts that Trump has demanded.

While gold is considered a hedge against inflation, higher interest rates tend to weigh on the non-yielding metal. Meanwhile, HSBC raised its silver price forecasts to $75 per ounce for 2026, citing the weaker U.S. dollar, although the bank believes further room to the upside is limited as silver remains overvalued.

Spot silver fell 1.1% to $87 per ounce, platinum fell 0.9% to $2,117.35, and palladium was down 1.3% at $1,480.56. (Reporting by Noel John in Bengaluru; editing by Barbara Lewis)