Dec 9 (Reuters) - Gold prices inched higher on Monday as investors awaited U.S. inflation data, set for release this week, for insights into the Federal Reserve's monetary policy.

FUNDAMENTALS

* Spot gold was up 0.1% at $2,631.60 per ounce, as of 0009 GMT, after hitting a session high at $2,647.99.

* U.S. gold futures were steady at $2,658.10.

* Traders are now looking forward to U.S. inflation data due on Wednesday.

* According to the CME Group's FedWatch Tool, markets currently see an 85.1% chance of a 25-basis-points rate cut this month. Lower rates decrease the opportunity cost of holding non-yielding bullion.

* Federal Reserve officials appeared on track to cut interest rates this month after data showed the U.S. labor market remained strong but continued to cool in November.

* U.S. employers added 227,000 jobs last month, a rebound from a hurricane-impacted slowdown in October, but the unemployment rate inched up to 4.2%, the Labor Department's monthly employment report showed on Friday.

* On the geopolitical front, Syrian rebels seized the capital Damascus unopposed on Sunday after a lightning advance that sent President Bashar al-Assad fleeing to Russia after a 13-year civil war and six decades of his family's autocratic rule.

* Gold is often seen as a safe-haven asset during times of economic or political uncertainty.

* Spot silver was flat at $30.99 per ounce, platinum held steady at $930.20 and palladium rose 0.6% to $962.10.

(Reporting by Rahul Paswan in Bengaluru; Editing by Sherry Jacob-Phillips)

((RahulKumar.Paswan@thomsonreuters.com ; If within U.S. +1 646 223 8780;;))