Gold steadies after hitting one-week low

Oct 15 (Reuters) - Gold prices were nearly steady on Thursday after touching a one-week low in the previous session as hot inflation data boosted expectations of a US Federal Reserve rate hike this month.

FUNDAMENTALS

* Spot gold was little changed at $4,114.57 per ounce, as of 0007 GMT, after hitting its lowest level since October 7 on Wednesday. US gold futures for December delivery rose 0.7% to $4,136.10.

* US consumer prices accelerated in September as the cost of gasoline surged, putting an interest rate increase later this month back on the radar.

* The probability of a US rate hike this month stood at roughly 32%, compared with 22% before the data, according to CME's FedWatch Tool.

* San Francisco Fed President Mary Daly said the US central bank will probably need to increase short-term interest rates further, though she signalled no need for a hike at the October 27-28 meeting.

* Although gold is viewed as an inflation hedge, higher interest rates reduce its appeal because it does not pay interest.

* Focus turns to the Producer Price Index (PPI) and retail sales data due later in the day.

* Among other metals, spot silver was up 0.2% at $55.72 per ounce, platinum fell 0.5% to $1,598.96 and palladium rose 0.6% to $1,100.25.