Jan 9 (Reuters) - Gold prices edged higher on Tuesday,
supported by a pullback in the dollar after an official U.S.
report citing consumers expect lower inflation cemented bets for
interest rate cuts from the Federal Reserve.
    
    FUNDAMENTALS
    * Spot gold        was up 0.2% at $2,032.39 per ounce, as of
0157 GMT, after hitting a three-week low on Monday. 
    * U.S. gold futures         also rose 0.2% to $2,038.30 per
ounce.
    * A New York Federal Reserve report on Monday said consumers
expect lower inflation as well as weaker income and spending
over the next several years.
    * Fed Governor Michelle Bowman retreated from her
persistently hawkish view, saying she now sees U.S. monetary
policy as "sufficiently restrictive" and signalled her
willingness to support eventual interest-rate cuts as inflation
eases.   
    * Lower interest rates decrease the opportunity cost of
holding non-yielding bullion.    
    * The dollar index        weakened 0.1%, making bullion more
attractive for other currency holders.       
    * Earlier this month, a stronger-than-expected jobs data
paired with the latest Fed minutes that noted an uncertainty
over timings of rate cuts, tempered some sentiments for an early
interest rate cut in the U.S..
    * Market participants are pricing in an about 62% chance of
a rate cut by the U.S. central bank in March, down from a nearly
90% probability seen before the New Year, according to the CME
FedWatch tool.
    * Investors now await Thursday's U.S. consumer price
inflation report for further clarity on the scale and depth of
Fed's rate cut.
    * Asia's stock indexes were mostly higher on Tuesday after a
tech-led surge on Wall Street.            
    * Meanwhile, core inflation in Japan's capital slowed for
the second straight month in December, taking some pressure off
the central bank to rush into exiting ultra-loose monetary
policy.
    * Spot silver        rose 0.1% to $23.11 per ounce, while
platinum        climbed 0.5% to $950.08, and palladium       
gained 0.5% to $1,002.76.
    
DATA/EVENTS (GMT)
0700  Germany   Industrial Output     Nov
1000  Euro Zone Unemployment Rate     Nov
1330  US        International Trade   Nov

 (Reporting by Harshit Verma in Bengaluru; Editing by Sherry
Jacob-Phillips)