* Gold shed 3.5% on Friday, the most since November 2020

* US CPI data due out on Wednesday

* US Federal Open Market Committee meeting starts on Tuesday

June 10 (Reuters) - Gold prices steadied on Monday, after dropping the most in three-and-a-half years in the previous session, as data out of China and the U.S. disappointed speculators betting on Chinese demand and an interest rate cut by the Federal Reserve.

Spot gold was up 0.1% at $2,296.76 per ounce, as of 0933 GMT. Meanwhile, U.S. gold futures fell 0.5% to $2,313.80.

Bullion lost about $83 on Friday, declining 3.5% in its biggest one-day drop since November 2020 after a stronger-than-expected U.S. jobs report dented hopes for a September rate cut and news on China's central bank holding off gold purchases put off investors betting on Chinese demand.

"People's Bank of China (PBOC) has never been a constant buyer. There have been distinct phases of buying followed by multi-month breaks. But, as long as the PBOC doesn't resume buying, gold prices could trade sideways because the China buying topic is a key market focus," Julius Baer analyst Carsten Menke said.

"Given that we had this decisive sentimental move on Friday, I'd be very surprised if we get a similar-sized volatility outbreak this week again unless there's a major surprise on the CPI side or the Fed side, but that seems quite unlikely."

Market focus has shifted to the U.S. consumer inflation report, due on Wednesday, the same day as the Fed's policy decision.

The U.S. central bank is not expected to make any change this week, and focus will be on comments from Fed Chair Jerome Powell and changes to economic projections from policymakers.

Bets of the Fed cutting rates in September fell to 49% from around 70% before the jobs data.

"We expect a lift in the Federal Reserve's median "dots plots" to two cuts in 2024 (from three); but inflation should still moderate, and a September cut is our base case," UBS said in a note.

Spot silver rose 1.7% to $29.67 per ounce, platinum was up 0.5% at $968.40 and palladium was steady at$912.15.

(Reporting by Harshit Verma in Bengaluru; Editing by Mrigank Dhaniwala)