** Shares of Australian gold stocks .AXGD rise as much as 3.5%, hitting their highest level since June 16

** The gold sector tracks bullion prices, which rose around 1% on Friday after U.S. inflation data reinforced expectations that the Federal Reserve could cut interest rates next month GOL/

** Gold producer Evolution Mining EVN.AX gains 3.2%, hitting its highest point since June 16

** Broader benchmark 200 ASX index .AXJO down 0.2%, as of 0047 GMT

** AXGD sub-index up nearly 60% this year, including the day's move

(Reporting by Rajasik Mukherjee in Bengaluru)

((Rajasik.Mukherjee@thomsonreuters.com))