PRECIOUS-Gold inches up after drop, but Fed stimulus concerns stay
* U.S. data could boost case for September tapering
* Dollar firms, U.S. Treasury yields rise
* U.S. economic performance remains mixed - Fed official
* St. Luis Fed President James Bullard speaks at 1915 GMT (Updates throughout, changes dateline from SINGAPORE)
By Clara Denina
LONDON, Aug 14 (Reuters) - Gold edged up on Wednesday, after dropping 1 percent the previous session, but a steady dollar and stronger U.S. Treasury yields, coupled with worries the U.S. Federal Reserve may start tapering its monetary stimulus soon capped further upside.
A pullback in the the Fed's $85 billion monthly bond purchases would support a higher interest rate environment that diminishes gold's attractiveness.
Uncertainty over the timing of the roll back has already pushed the metal down 21 percent this year, after 12 consecutive years of gains.
"One of the prevailing factors for gold at the moment is the dollar movement and in the total absence of other fresh factors that can impact prices, the market remains stuck on the QE, non-QE story," MKS analyst Frederic Panizzutti said.
"We are in pure summer trading and we may remain in the $1,300/$1,350 range for few weeks yet."
Spot gold rose 0.3 percent to $1,324.86 an ounce by 1048 GMT. It fell 1.1 percent on Tuesday, ending a four-day winning streak after strong U.S. economic data and further import curbs by key buyer India.
The dollar was firm, having hit a near one-week high against a basket of currencies after U.S. retail sales data pointing to an acceleration in consumer spending on Tuesday sent Treasury yields above 2.7 percent and bolstered the case for a Fed tapering sooner rather than later.
The U.S. economic performance remains too mixed for Fed policymakers to lay out a detailed path for reducing and eventually halting their asset-purchasing next month, Atlanta Fed President Dennis Lockhart said on Tuesday. [ID:nL2N0GE1EH
The next Fed meeting is scheduled for Sept. 17-18. Until then, markets will scrutinise economic data to gauge the strength of economic recovery. The main event on Wednesday is a speech by St. Louis Fed President James Bullard on the U.S. economy and monetary policy at 1915 GMT.
"Once the taper is out, it will hit gold once more, though likely not to the same extent as drops earlier this year," UBS Wealth Management analyst Dominic Schnider said.
Traders said gold prices were likely to rise in India this week, extending gains past their four-month high, due to the latest import duty hike that was introduced on Tuesday.
The Indian government has raised import duties on gold three times this year in an attempt to strengthen the rupee and reduce the country's trade deficit.
"Despite the expectations that gold imports may fall, India's appetite for bullion is anticipated to pick up later in the year due to seasonal demand," HSBC analysts wrote in a note.
Analysts say this could increase further illegal gold supply into India.
Silver rose 0.5 percent to $21.51 an ounce, having touched a two-month high of $21.76 on Tuesday, on track for its sixth straight session of gains for the first time since January.
Platinum fell 0.9 percent to $1,485.24 an ounce. Palladium fell 0.4 percent to $733.50 an ounce. (Additional reporting by A. Ananthalakshmi in Singapore; editing by Keiron Henderson)
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