* Gold drops below $ 1,900 an ounce.
* US consumer price index rose 0.6% in May.
* Palladium on track for weekly decline (comments added, prices updated)
June 11 (Reuters) – Gold prices tumbled on Friday under pressure from a stronger dollar, with some investors betting the rise in US consumer prices is temporary and will not affect the Federal Reserve’s current monetary stimulus.
Spot gold fell 0.8% to $ 1,883.16 an ounce by 1304 GMT. US gold futures fell 0.6% to $ 1,885.50.
Inflation turned out to be slightly above expectations, “but there remains a perception that these inflation rates will level out from now on,” said UBS analyst Giovanni Stunovo, adding that gold is having difficulty holding above $ 1,900.
While it is difficult for him to stay above this level, “some investors will use this to sell gold or create short positions,” added Stunovo.
Data showed that US consumer prices rose steadily in May, while jobless claims fell to their lowest level in nearly 15 months last week.
The dollar index rose 0.3%, which made gold less attractive to investors holding other currencies.
Meanwhile, the European Central Bank on Thursday kept its monetary policy unchanged and pledged to provide a steady stream of stimulus throughout the summer.
Now all the attention will be focused on the Fed meeting on June 15-16 on policy issues. A significant number of Fed observers said the central bank would wait until the end of the year before announcing a cut, according to a Reuters poll.
“Since the FOMC is unlikely to draw increased attention to the narrowing next week, at the end of August, attention will be drawn to Jackson Hole, where a change in course will be announced,” said Ole Hansen, head of commodity strategy at Saxo Bank.
Silver rose 0.6% to $ 28.14 an ounce, while platinum fell marginally to $ 1,150.69.
Palladium rose 0.4% to $ 2,786.69, but continued to decline over the week. (Reporting by Arundati Sarkar and Nishara Karuwalli Patikkal in Bangalore; editing by Elaine Hardcastle, Kirsten Donovan)