* Dollar wallows at multi-month lows * Platinum, palladium up more than 1% * U.S. Treasury yields at two-week low (Updates prices) By Brijesh Patel May 26 (Reuters) - Gold prices rose above the key psychological level of $1,900 per ounce on Wednesday, helped by a weaker dollar and growing inflation concerns after Federal Reserve officials maintained a dovish stance over rates. Spot gold was up 0.3% to $1,904.50 per ounce by 0647 GMT, its highest level since Jan. 8. U.S. gold futures gained 0.4% to $1,905.40 per ounce. "A weaker dollar is helping and growing inflation risks are outweighing everything right now. This is about hedge against inflation right now," said Stephen Innes, managing partner at SPI Asset Management. "Even if inflation is high, they're (the Fed) going to be very, very dovish. What really matters for gold is front-end real rates. The Feds will continue to keep front-end rates low, which is going to weaken the dollar and gold is going to do quite well." The dollar index was pinned near a 4-1/2-month low against its rivals, making gold cheaper for other currency holders. Benchmark U.S. Treasury yields were hovering near a two-week low, reducing the opportunity cost of holding non-interest bearing gold. Gold, often used as a hedge against inflation, has benefited from recent data showing a rise in prices in the United States and the United Kingdom. Richard Clarida, the Fed's vice chair, said on Tuesday the U.S. central bank could curb any possible outbreak of inflation without throwing the economic recovery off track. Investors now await key U.S. economic data due later this week, including gross domestic product, jobless claims and consumer spending. Meanwhile, U.S. Senate Republicans plan to unveil a counteroffer to President Joe Biden's $1.7 trillion infrastructure proposal on Thursday, though one of their leaders said on Tuesday the two sides remained far apart. Elsewhere, palladium rose 1.1% to $2,801.20 per ounce, silver climbed 0.4% to $28.09 and platinum jumped 1% to $1,203.99. (Reporting by Brijesh Patel in Bengaluru; editing by Subhranshu Sahu and Jason Neely)
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