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PRECIOUS-Gold slips on firm dollar as focus shifts to U.S. inflation data

* U.S. CPI data, ECB meeting on Thursday

* Medium to longer term outlook for gold positive- analysts (Recasts, adds comments, updates prices)

June 7 (Reuters) - Gold retreated on Monday as the U.S. dollar firmed slightly, with investors’ focus switching to U.S. inflation readings later this week that might give some clue to how long the Federal Reserve will hold off from tapering monetary support.

The dollar index strengthened 0.1%, making gold more expensive for holders of other currencies.

Spot gold was down 0.3% to $1,883.50 per ounce by 0929 GMT. U.S. gold futures eased 0.3% to $1,885.40.

Prices rose more than 1% in the previous session after a weaker-than-expected U.S. monthly jobs report calmed investor fears about the Fed reining in monetary stimulus soon.

While a firmer U.S. dollar and U.S. bond yields are both weighing on prices, gold has very good chances of coming back above $1,900 an ounce because the environment continues to be very constructive for the metal, said Commerzbank analyst Eugen Weinberg.

Longer to medium term, “we might see more volatility on equity markets which will be increasing the value of gold as a safe haven as inflation protection,” Weinberg added.

Bullish fundamentals remain in place and “only a sharp steepening of the U.S. yield curve is likely to change that,” said Jeffrey Halley, OANDA senior market analyst.

Lower interest rates decrease the opportunity cost of holding non-yielding gold, also considered a hedge against inflation that could follow stimulus measures.

And market attention has switched to the next U.S. consumer price index report, and a European Central Bank policy meeting due on Thursday. The ECB is widely expected to maintain its stimulus measures with tapering a distant prospect.

Silver dipped 0.9% to $27.53 per ounce, palladium was down 0.2% to $2,840.05, while platinum fell 0.2% to $1,159.60. (Reporting by Arundhati Sarkar in Bengaluru; Editing by Simon Cameron-Moore)

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