(Adds analyst’s comment and updates prices) * Dollar index rises 0.1% * Higher inflation will be temporary - Fed official * Gold prices will consolidate in short term - analyst June 28 (Reuters) - Gold prices were trapped in a tight range on Monday as investors remained wary over mixed signals from U.S. Federal Reserve officials on monetary policy tightening despite weaker-than-expected inflation data. Spot gold was up 0.2% at $1,783.16 per ounce by 0624 GMT, after hitting its lowest since June 21 at $1,770.36 earlier in the session. U.S. gold futures gained 0.3% to $1,783.60. “There’s really indecision in the gold market... the jury’s still out (on the Fed’s timeline on tapering),” said IG Market analyst Kyle Rodda. “On one hand, we’ve to think about normalising policy, but on the other, a lot of Fed speakers are suggesting inflation will be transitory, so we don’t need the Fed to slam on the brakes. And, that is kind of sending mixed signals.” Gold prices rose as much as 0.8% on Friday after data showed the U.S. personal consumption expenditures price index, the Fed’s preferred inflation measure, came in below expectations. Minneapolis Fed President Neel Kashkari said he expected recent high inflation readings would not last. Limiting gold’s advance, the dollar index rose 0.1% against six other major currencies. “Reality is the Federal Reserve’s policy tapering is still a distant event, meaning markets can get back into party mode in the short term,” said Michael Langford, director at corporate advisory AirGuide. Gold prices will consolidate in the short term, with the short-term target at $1,790 an ounce, Langford added. Investors were also keeping a close watch on the negotiations over an U.S. infrastructure deal. Gold is often considered a hedge against potential inflation that is likely to result from widespread stimulus. Among other precious metals, silver rose 0.3% to $26.14 per ounce, palladium gained 0.6% to $2,651.68. Platinum added 0.1% to $1,111.83. (Reporting by Sumita Layek in Bengaluru; Editing by Subhranshu Sahu) Our Standards: The Thomson Reuters Trust Principles.