PRECIOUS-Gold rebounds from U.S inflation data-driven losses as dollar wilts

    * Strong U.S. inflation report followed by weak retail sales
    * Dollar surrenders gains, Wall Street swings higher
    * Other precious metals hit one-week highs
    * GRAPHIC-2018 asset returns:

 (New throughout, updates prices, market activity and comments,
adds second byline, NEW YORK dateline)
    By Renita D. Young and Jan Harvey
    NEW YORK/LONDON, Feb 14 (Reuters) - Gold prices climbed
nearly 2 percent on Wednesday, rebounding from early losses that
followed stronger-than-expected U.S. inflation data, as the
dollar surrendered gains and equities swung higher. 
    The dollar initially rose after the U.S. Labor Department
report showed U.S. consumer prices increased more than expected
in January, and traders bet the U.S. Federal Reserve would boost
interest rates faster than previously forecast.       
    However, softer-than-forecast retail sales data and an
immediate pullback in equities markets sparked concern that the
Fed would struggle to raise rates quickly enough to offset
inflation pressures. 
     Spot gold        was up 1.7 percent at $1,351.81 per ounce
by 1:37 p.m. EST (1837 GMT), after reaching $1,355.08, its
highest since Jan. 26. U.S. gold futures        for April
delivery settled up $27.60 per ounce, or 2.1 percent, at $1,358.
    Bullion was on track for its strongest daily performance
since May 2017. Inflation fears generally prompt investors to
buy the precious metal.
    "Gold investors are looking into gold as a hedge against
inflation and higher inflation expectations are boosting an
interest in gold," said Suki Cooper, precious metals analyst at
Standard Chartered Bank.
    U.S. stocks fell immediately after the inflation report,
then rebounded and traded higher in the afternoon. In addition
to the strong inflation numbers, market watchers noted a
surprise drop in January retail sales.     
    "Given the weak retail sales report alongside (the inflation
data), the markets are probably going to talk about stagflation,
where you are getting stronger inflation but not really getting
a stronger consumer," said Gennadiy Goldberg, an interest rate
strategist at TD Securities in New York. 
    "Those two in tandem might be leading to this flattener in
Treasuries, though retail sales are pretty volatile."
    Stock markets, which scaled record peaks in recent months,
slid sharply last week, dragging gold prices as investors sought
refuge in the U.S. dollar.
    Meanwhile, silver        was up 1.9 percent at $16.86 an
ounce after hitting a one-week high of $16.98. Palladium       
gained 1.8 percent to $1,002.25, earlier hitting a one-week high
$1,004.60 high. Platinum        rose 2 percent at $993.24,
earlier hitting $998.80, its highest in nearly three weeks. 
    The platinum market is set for another surplus this year
after recording oversupply of 110,000 ounces in 2017, Johnson
Matthey said in a report on Wednesday, though sister metal
palladium is tipped for another deficit.             

 (Additional reporting by Eileen Soreng in Bengaluru; Editing by
David Gregorio and David Evans)