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U.S. weekly jobless claims data due at 1330 GMTGold benefiting from flight to safety after U.S. data – analystU.S. producer prices fall more than expected in DecemberJan 19 (Reuters) – Gold prices rose on Thursday and are set to snap a three-day losing streak, helped by a weaker dollar and as signs of cooling U.S. inflation raised bets on smaller rate hikes by the Federal Reserve.Spot gold rose 0.3% to $1,909.49 per ounce by 1125 GMT. U.S. gold futures edged 0.2% higher to $1,910.50.There was a flight to safety after disappointing U.S. economic data that had a negative impact on investor sentiment, in turn benefiting gold, said ActivTrades senior analyst Ricardo Evangelista.”This dynamic also reinforces the narrative that the Fed will now be more likely to slow down its ongoing rate hikes…and this creates a downside for the dollar and is once again positive for gold.”Data on Wednesday showed U.S. retail sales fell by the most in a year in December, while producer prices fell more than expected last month, offering more evidence that inflation was receding.Traders are pricing in a 25-basis point rate hike at the Fed’s Jan. 31-Feb. 1 meeting. The U.S. central bank slowed its pace of hikes to 50 bps in December after four-straight 75-bps increases.FEDWATCHMaking gold more appealing for overseas buyers, the dollar index eased on the day after falling to its lowest in nearly eight months in the previous session.Philadelphia Fed President Patrick Harker and Dallas Fed President Lorie Logan both backed a slower pace of tightening on Wednesday.Given the mixed messaging coming from Fed officials, gold has struggled to gain a firm footing above $1,920 and is looking distinctly overbought on the charts, independent analyst Ross Norman said.Interest rate hikes, intended to curb inflationary pressure, also reduce the appeal of non-yielding gold.Investors will later scan the weekly U.S. jobless claim data due at 1330 GMT.Spot silver fell 0.1% to $23.41 per ounce, platinum shed 1.3% to $1,024.76, and palladium dropped 1.4% to $1,694.86.Reporting by Arundhati Sarkar in Bengaluru; editing by John Stonestreet and Sharon SingletonOur Standards: The Thomson Reuters Trust Principles.

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