* Spot gold fell 1% last week - biggest weekly decline in six
* Markets see 49% chance of March rate cut vs 71% chance 2-wk ago
* U.S. PMI due Wednesday, GDP advance estimate due Thursday, PCE due Friday
Jan 22 (Reuters) - Gold prices were little changed on Monday, as traders cautiously awaited fresh data on the U.S. economy and the Federal Reserve's preferred inflation gauge due later this week, leading up to the central bank's interest rate decision next week.
Spot gold edged 0.1% lower to $2,026.39 per ounce by 0348 GMT.
U.S. gold futures fell 0.1% to $2,028.00.
Bullion fell about 1% last week - its biggest weekly decline in six.
Last week, Fed officials said that it needs more inflation data in hand before any rate cut judgment could be made and that the baseline for cuts to start was in the third quarter.
The remarks came on the heels of improved U.S. consumer sentiment, solid labor market and retail sales data that indicated the economy remained firm.
The odds of a Fed rate cut in March have dropped to 49% from about 71% two weeks ago, according to LSEG's interest-rate probability app IRPR.
The U.S. dollar index fell 0.1%, while yields on benchmark U.S. 10-year Treasury notes slipped from a more than a month high to 4.1111%.
Investors will be watching out for U.S. flash PMI report on Wednesday, fourth-quarter advance GDP estimates due on Thursday and personal consumption expenditures (PCE) data on Friday.
"If PCE inflation treads higher than the headline CPI report, I suspect USD bears will continue to cover, to strengthen the dollar, and cap gold's upside potential," said Matt Simpson, a senior analyst at City Index.
"Meanwhile a pickup in PMI will strengthen the case for fewer Fed cuts and further push back expectations for the first cut."
Higher interest rates increase the opportunity cost of holding bullion.
Spot silver fell 0.2% to $22.55 per ounce, platinum was steady at $898.95, and palladium fell 0.1% to $945.88.
(Reporting by Harshit Verma in Bengaluru; Editing by Rashmi Aich)
