* U.S. CPI rises 2.6% year-on-year
* U.S. 10-year yields tick lower after hitting one-week peak
* Platinum hits two-week low
* Palladium rises to near 1-month high
(New throughout, adds analyst comments, updates prices)
By Shreyansi Singh
April 13 (Reuters) - Gold prices rebounded from their lowest
in more than a week on Tuesday after data showing a sharp rise
in U.S. inflation bolstered gold's appeal as an inflation hedge
and weighed on the dollar.
Spot gold was 0.6% higher at $1,742.86 per ounce by
10:47 a.m. EDT (1447 GMT), after dipping to its lowest since
April 5 at $1,722.67 earlier. U.S. gold futures rose 0.5%
to $1,740.60 per ounce.
"We needed to see some inflation to get gold moving and we
saw it this morning with that CPI number," said Bob Haberkorn,
senior market strategist at RJO Futures, adding that a weaker
dollar and retreating yields supported prices further.
U.S. consumer prices rose by the most in more than 8-1/2
years in March, kicking off what most economists expect will be
a brief period of higher inflation. The consumer price index
jumped 0.6% last month after rising 0.4% in February.
The U.S. dollar slipped to three-week lows after the data,
making gold more appealing for holders of other currencies,
while benchmark 10-year Treasury yields also ticked lower.
Further supporting safe-haven gold were concerns after U.S.
health officials recommended pausing the use of Johnson &
Johnson's COVID-19 vaccine, analysts said.
A close above the $1,750 level would be supportive for gold
to try to make a move back toward the $1,800 level, Haberkorn
added.
As the world is starting its exit from the COVID-19 crisis,
the breadth of central banks purchasing gold could potentially
rise substantially considering the massive increase in sovereign
debt and the rapid pace of money supply growth in reserve
currency countries, TD Securities wrote in a note.
Elsewhere, silver rose 2% to $25.33 per ounce, while
palladium was up 0.4% at $2,685.89 per ounce after
climbing to its highest since March 18 at $2,710.
Platinum fell 0.7% to $1,161.88 per ounce, having
earlier dipped to its lowest in about two weeks at $1,158.
(Reporting by Shreyansi Singh in Bengaluru; Editing by Will
Dunham)
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