PRECIOUS-Gold gains ground on strong U.S. inflation data, weaker dollar

* Platinum hits two-week low

* Palladium rises to near one-month high

* U.S. CPI rises 2.6% on year-on-year basis (Updates prices)

By Shreyansi Singh

April 13 (Reuters) - Gold prices bounced off a more than one-week low on Tuesday after data showing a sharp rise in U.S. inflation bolstered bullion's appeal as an inflation hedge and weighed on the dollar.

Spot gold XAU= climbed 0.8% to $1,745.94 per ounce by 1:42 p.m. EDT (1742 GMT), after earlier dipping to $1,722.67, its lowest mark since April 5. U.S. gold futures GCv1 settled up 0.9% at $1,747.6.

"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. U.S. dollar slipped to three-week lows after the data, making gold cheaper for holders of other currencies, while benchmark 10-year Treasury yields also eased. US/ USD/

Further supporting safe-haven gold were concerns raised by U.S. health officials' decision to recommend a pause in the use of Johnson & Johnson (NYSE: JNJ )'s COVID-19 vaccine, analysts said. the moment, we need to see a decisive breakout above $1,765 in order to spark another wave of buying up to $1,800," said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

"The $1,750 level has been a strong resistance, so we're getting up near that level," he said, adding that geopolitical risk tied to news of Iran stepping up its nuclear enrichment had also sparked a lot of buying of gold and silver. other precious metals, silver XAG= rose 2% to $25.34 per ounce.

Palladium XPD= gained 0.7% to $2,695.58 after climbing to its highest level since March 18 at $2,710.

Platinum XPT= fell 0.9% to $1,158.98 per ounce, having earlier dipped to its lowest price in two weeks at $1,151.86.