Updates for US morning open

By Sukanya Mitra

June 26 (Reuters) - Gold edged higher on Friday as the dollar weakened and expectations of U.S. interest rate hikes eased slightly following inflation data, though prices were still on track for a fourth consecutive weekly decline.

Spot gold XAU= was up 0.51% to $4,046.70 per ounce by 9:39 a.m. EDT (1339 GMT).

U.S. gold futures GCcv1 for August delivery rose 0.35% to $4,061.40 per ounce.

The U.S. dollar eased from recent highs after the release of the Fed's preferred inflation gauge on Thursday. USD/

The U.S. Personal Consumption Expenditures Price Index surged 4.1% in the 12 months through May, matching economists' forecasts in a Reuters poll.

Traders are pricing in about a 60% chance of a U.S. rate hike in September, lower than an earlier expectation of 64%, according to CME Group's FedWatch Tool. FEDWATCH/

Gold is seeing a modest rebound after coming under selling pressure earlier this week, said Jim Wyckoff, a market analyst at American Gold Exchange.

Higher interest rates and tighter monetary policy reduce the appeal of non-yielding bullion, as they tend to boost bond yields and increase returns on interest-bearing assets.

Spot gold hit more than a seven-month low earlier this week and prices were down 2.6% for the week.

TD Securities said in a note that, given gold's inverse relationship with both higher oil prices and a stronger U.S. dollar, sustained strength in energy markets could put further downward pressure on the precious metal in the months ahead. O/R

Gold started trading at a premium in India this week for the first time in a month and a half, as a price correction lifted buying, while demand stayed subdued in China, the top consumer. GOL/AS

Among other precious metals, spot silver XAG= rose 0.42% to $58.1109 per ounce.

Platinum XPT= gained 0.21% to $1,604.45 and palladium XPD= jumped 1.25% to $1,199.25.