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Gold prices hovered near one-month lows on Friday as markets assessed the cooler-than-expected U.S. inflation data, with bullion still set to wrap up its worst week in seven as the U.S. dollar and bond yields stood strong.

FUNDAMENTALS

* Spot gold edged 0.2% higher to $1,914.87 per ounce by 0136 GMT, but still traded near its lowest levels since July 7 seen earlier in the day. U.S. gold futures were flat at $1,946.90.

* Gold prices have slid about 1.4% for the week so far as the U.S. dollar index and benchmark 10-year Treasury bond yields were both on track for their fourth consecutive weekly gain. [USD/] [US/]

* The U.S. consumer price index (CPI) gained 0.2% last month, matching June's increase. The annualized rate climbed 3.2%, but was less than the Reuters forecast of 3.3%.

* Following the data, traders bet that U.S. Federal Reserve policymakers are unlikely to raise interest rates again in 2023 and will probably start cutting them early next year.

* Gold tends to gain when expectations of interest rate hikes ease because lower rates reduce the opportunity cost of holding non-yielding bullion.

* The Fed is making progress in its fight to lower inflation, Philadelphia Fed President Patrick Harker said on Thursday, as the U.S. economy reaches a "watershed moment."

* San Francisco Fed Bank Mary Daly said that while recent inflation data is moving in the right direction, more progress is needed before she would feel comfortable the Fed has done enough.

* Among other precious metals, spot silver rose 0.4% to $22.76 an ounce and platinum added nearly 1% to $914.80. Still, both were on track for their fourth straight weekly loss.

* Palladium jumped 1.1% to $1,300.36, eyeing best week since mid-June.

DATA/EVENTS (GMT)

0600 UK GDP Est 3M/3M June

0600 UK GDP Estimate MM, YY June

0600 UK Manufacturing Output MM June

0600 UK GDP Prelim QQ, YY Q2

0645 France CPI (EU Norm) Final MM, YY July

1230 US PPI Machine Manuf'ing July

1400 US U Mich Sentiment Prelim Aug