Gold eases after climbing over 1% in previous session

Oct 16 (Reuters) - Gold prices inched lower during early Asia trade on Friday after rising more than 1% in the previous session, while market participants tried to gauge the Federal Reserve's future policy trajectory.

FUNDAMENTALS

* Spot gold was down 0.4% at $4,152.99 per ounce, as of 0005 GMT, after gaining in the previous session on support from a weaker dollar and lower US Treasury yields. However, prices were on track for a weekly fall.

* US gold futures for December delivery rose 0.1% to $4,173.90.

* US producer prices increased by the most in 4-1/2 years in September amid rising costs for goods and services, the latest indication of inflation broadening out beyond energy products. The data followed Wednesday's consumer price report, which showed prices accelerated in September on a surge in gasoline costs.

* According to CME's FedWatch Tool, traders are currently pricing in a 28% probability of a rate hike later this month and 93% chance of an increase in December.

* Chicago Fed President Austan Goolsbee said this week's stronger-than-expected inflation data has been "discouraging."

* Meanwhile, Fed Bank of Cleveland President Beth Hammack said the Fed might need to hike rates more aggressively if there were to be a notable deterioration in the public's inflation expectations.

* While gold is considered a hedge against inflation, higher interest rates reduce the appeal of the non-yielding asset.

* On the geopolitical front, Yemen's Houthis fired missiles at the presidential palace complex in the southern city of Aden, killing five people, the government said, as the Saudi-led coalition listed dozens of Houthi attacks on Saudi infrastructure in recent weeks.

* Spot silver fell 0.6% to $57.09 per ounce, platinum lost 0.1% to $1,624.05 and palladium rose 0.2% to $1,128.70. All three metals headed for weekly losses.