Jan 12 (Reuters) - Gold prices rose on Friday, supported
by a softer dollar and escalating Middle East conflict lifting
safe-haven appeal, but were set for a second weekly fall as
traders reassessed hopes for early interest rate cuts in the
United States.
    
    FUNDAMENTALS
    * Spot gold        was up 0.3% at $2,034.06 per ounce, as of
0231 GMT. However, it has fallen 0.6% so far in the week. 
    * U.S. gold futures         rose nearly 1% to $2,038.40.   
    * The dollar index        fell 0.1%, making bullion more
attractive for buyers holding other currencies.       
    * The United States and Britain launched strikes against
sites linked to the Houthi movement in Yemen, while Saudi Arabia
called for restraint in light of the strikes.
    * Data showed U.S. consumer prices rose more than expected
in December, but excluding volatile food and energy costs the
pace of price increases fell to 3.9% from 4% on an annual basis,
showing ongoing moderation in underlying price pressures.
   * Chicago Fed President Austan Goolsbe signalled he's not
sure if it is enough progress for the Fed to start cutting
rates, while Cleveland Fed President Loretta Mester said it
would likely be too soon to cut rates in March.
    * The Fed is expected to hold its policy rate steady at the
Jan. 30-31 meeting. Financial markets see a 71% chance that rate
cuts will begin in March.
    * Overall, traders are betting on 150 basis points (bps) of
Fed rate cuts this year, according to LSEG's interest rate
probability app, IRPR.
    * Investors will next look at U.S. producer prices data due
at 1330 GMT.
    * Spot silver        rose 0.6% to $22.88 per ounce, platinum
       climbed 0.3% to $917.48, and palladium        gained 0.3%
to $991.02.
    
DATA/EVENTS (GMT)
0300  China     Trade balance               Dec
0700  UK        GDP Estimate                Nov
0700  UK        Industrial Output           Nov
1200  India     Industrial Output           Nov
1200  India     CPI Inflation               Dec
1330  US        Producer Price Index        Dec
1500  US        Fed's Neel Kashkari speaks  --

 (Reporting by Harshit Verma in Bengaluru; Editing by Subhranshu
Sahu)