NEW YORK/LONDON, Nov 28 (Reuters) -

MSCI's global stock index turned higher on Tuesday while the dollar fell as a Federal Reserve official suggested that the U.S. central bank was done raising rates and could even consider rate cuts if inflation keeps easing.

Gold prices were up more than 1%, hit a more than six-month high and tracking for their fourth consecutive gain with help from the retreating dollar and hopes for easier Fed policy.


U.S. dollar

however hit a roughly three-and-a-half-month low against a basket of peers after Fed Governor

Christopher Waller

flagged the possibility of lowering the Fed policy rate in the months ahead if inflation continues to come down.

Waller also said he was "

increasingly confident

" the current interest rate setting will prove adequate to lower inflation to the Fed's 2% target.

Another Fed governor

Michelle Bowman

said the U.S. central bank will likely need to raise borrowing costs further in order to bring inflation back down to its target.

But, traders appeared to take their cues from Waller with increased bets for the first rate cut taking place as soon as March with the probability for a 25 basis-point cut last at nearly 35%, up from 21.5% on Monday, according to the latest data from CME Group's Fedwatch tool. The majority are expecting a cut of at least one notch in May, according to CME data.

Also on Tuesday, a survey showed U.S.

consumer confidence

rose in November after three months of declines, though households still anticipated a recession over the next year.

"We're chopping around here. This is a late cycle environment where we're still waiting for the lagged impact of higher interest rates and the economy is still being supported by all that fiscal stimulus we did in the last several years," said Matthew Miskin, co-chief investment strategist at John Hancock Investment Management in Boston.

The Dow Jones Industrial Average rose 173.95 points, or 0.49%, to 35,507.42, the S&P 500 gained 16.77 points, or 0.37%, to 4,567.2 and the Nasdaq Composite added 60.57 points, or 0.43%, to 14,301.59.

The pan-European STOXX 600 index lost 0.27% and MSCI's gauge of stocks across the globe gained 0.45%.

Later this week the spotlight will be on the U.S. October personal consumption expenditures report (PCE), which includes core PCE, which is the Fed's preferred measure of inflation. Also euro zone consumer inflation figures should give further clarity on where prices and monetary policy are headed there.

In currencies, the dollar index fell 0.388%, with the euro up 0.37% to $1.0994.

The Japanese yen strengthened 0.79% versus the greenback at 147.51 per dollar, while Sterling was last trading at $1.2692, up 0.53% on the day.

After the Fed commentary,

U.S. Treasury yields

dipped with benchmark 10-year notes were down 3.8 basis points to 4.350%, from 4.388% late on Monday.

Oil futures gained steam on the possibility OPEC+ would deepen supply cuts at a meeting scheduled for Thursday and due to a storm-related drop in Kazakh oil output, as well as the weaker U.S. dollar.

U.S. crude rose 2.64% to $76.84 per barrel and Brent was at $82.03, up 2.56% on the day.

In precious metals, Spot gold added 1.1% to $2,036.49 an ounce.

(Additional reporting by Sinéad Carew, Gertrude Chavez-Dreyfuss and Chuck Mikolajczak in New York, Amanda Cooper in London, Ankur Banerjee Editing by Frances Kerry and Marguerita Choy)