(Adds comments, updates prices)
* Gold faces strong resistance around $1,870s - analysts
* UK inflation leaps to 10-year high
Nov 17 (Reuters) - Gold prices gained on Wednesday as inflation worries boosted demand for the safe-haven metal, even as the U.S. dollar held near multi-month highs on rising bets of an early hike in interest rates in the United States.
Spot gold rose 0.7% to $1,862.56 per ounce by 1316 GMT. U.S. gold futures gained 0.7% to $1,866.60.
“Investors are afraid of inflation going out of control and (are) therefore buying gold to hedge against that risk,” said Carlo Alberto De Casa, external analyst at Kinesis Money.
Meanwhile, British inflation hit a 10-year high as household energy bills rocket, bolstering expectations the Bank of England will raise interest rates in December.
Rate increases remain a potential risk for gold and only a clear break above $1,875 may drive further gains, De Casa said. Higher interest rates increase the opportunity cost of holding non-interest bearing gold.
The U.S. dollar - which also contends with gold as a safe-store of value - touched its highest since July 2020 following a better-than-expected U.S. retail data.
“The Fed will certainly be keeping an eye on retail sales among other measures of the economy such as inflation and wage growth, as the data provides valuable insights about the health of the consumer,” said Fawad Razaqzada, analyst with ThinkMarkets.
“That said, don’t think one month’s worth of data is going to change the Fed’s rate path.”
The U.S. Federal Reserve began phasing out its bond-buying this month and expects to end purchases altogether by mid-2022. Its next policy-setting meeting is in mid-December.
St Louis Fed President James Bullard urged a quicker end to asset purchases to put the Fed in a position to raise rates as soon as the spring.
Elsewhere, spot silver jumped 1.2% to $25.09 per ounce, platinum rose 0.3% to $1,063.92, and palladium edged 0.3% higher to $2,165.68.
Reporting by Arundhati Sarkar in Bengaluru; Editing by Robert Birsel, Krishna Chandra Eluri and Arun Koyyur
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