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June 25 (Reuters) - Gold prices rose on Thursday after the U.S. inflation reading came in largely in line with expectations, easing concerns about an imminent Federal Reserve interest rate hike and pushing down the dollar and Treasury yields.

By 1315 GMT, spot gold had risen 0.7 percent to $ 4,029.09 an ounce, after falling as much as 1 percent earlier in the session .

U.S. gold futures for August delivery rose 0.9 percent to $4,045.20 an ounce.

David Meijer, director of metals trading at High Ridge Futures, said, "The personal consumption expenditures data appears to have largely been in line with expectations. At this stage, that is one of the reasons why gold is relatively stable today."

Data showed that the U.S. personal consumption expenditures price index rose 4.1 percent year-on-year in May, marking the largest increase and the first reading above four percent since April 2023. The reading was in line with the expectations of economists polled by Reuters.

The dollar weakened after the data release, making gold cheaper for foreign traders. US Treasury yields also declined slightly.

The CME Group’s FedWatch tool indicates that markets see an 80 percent probability of an interest rate hike in December, compared with an 85 percent probability before the release of the personal consumption expenditures data and a 61 percent probability before last week’s Federal Reserve monetary policy statement.

While gold is traditionally seen as a hedge against inflation, it loses its appeal as a non-yielding asset when interest rates rise.

As for other precious metals, silver rose 2.2 percent in spot trading to $ 58.68 an ounce. Platinum gained 1.8 percent to $ 1,606.09 and palladium climbed 2.7 percent to $ 1,199.47 .