PRECIOUS-Gold firms as dollar dips ahead of U.S. inflation test

    * U.S. April CPI data due at 1230 GMT 
    * Gold hit three month-low earlier in session

 (Updates prices)
    By Eileen Soreng
    May 11 (Reuters) - Gold rose on Wednesday supported by a
pullback in the dollar and U.S. Treasury yields, while investors
prepared for U.S. inflation data that could determine how
aggressively the Federal Reserve will hike interest rates. 
    Spot gold        rose 0.7% to $1,851.26 per ounce by 1144
GMT, rebounding from its lowest since Feb. 11 touched earlier in
the session. U.S. gold futures        gained 0.6% to $1,851.50. 
    The dollar        dipped 0.3%, but was not far from a
two-decade high touched on Monday, while the benchmark U.S.
10-year Treasury yields             retreated from recent highs.
    "Spot gold is seeing some reprieve as the U.S. dollar
moderates and 10-year Treasury yields dip back below 3% ahead of
today's keenly-watched U.S. inflation data," said Han Tan, chief
market analyst at Exinity.
    "If U.S. inflation is shown to be climbing persistently,
that could see spot gold break below its 200-day simple moving
average and immediate Fibonacci support level around the
mid-$1,830 region." 
    Analysts expect a sharp pullback in monthly growth of the
U.S. consumer price index for April, due at 1230 GMT, cooling to
0.2% from 1.2% in March, for an annual increase of 8.1%.
    U.S. central bank officials fortified on Tuesday their
arguments for the swiftest series of interest rate hikes since
at least the 1990s to combat inflation.             
    If inflation is softer than expected, prices might bounce,
with investors prioritising the data's impact on the Fed instead
of bullion's role as a hedge, according to Ilya Spivak, a
currency strategist at DailyFX. 
    Rising short-term U.S. interest rates lift the opportunity
cost of holding bullion, while boosting the dollar in which gold
is priced.       
    Spot silver        gained 2.3% to $21.72 per ounce, platinum
       climbed 2.8% to $990.59, while palladium        eased
0.7% to $2,051.52. 

 (Reporting by Eileen Soreng and Bharat Govind Gautam in
Editing by Tomasz Janowski/Mark Heinrich)