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PRECIOUS-Gold recovers as U.S. stimulus hopes buoy appeal

    * Dollar index hits four-week high
    * Treasury nominee Janet Yellen to say U.S. does not seek
weaker
dollar
    * Interactive graphic tracking global spread of coronavirus:
tmsnrt.rs/3mvcUoa

 (Updates prices)
    By Shreyansi Singh
    Jan 18 (Reuters) - Gold inched away from a 1-1/2-month low
touched earlier on Monday as expectations of additional fiscal
stimulus in the United States buoyed bullion's appeal as an
inflation hedge. 
    Spot gold        was up 0.5% at $1,835.96 per ounce by 12:29
p.m. EST (1729 GMT) after falling to $1,809.90, its lowest since
Dec. 2. U.S. gold futures        rose 0.4% to $1,836.50.    
    "This new (U.S.) government will provide more economic
stimulus and also the policy of the U.S. Federal Reserve is
unlikely to become more hawkish going forward," said Commerzbank
analyst Eugen Weinberg.
    "Therefore we are likely to see continued support for gold
prices."
    U.S. President-elect Joe Biden laid out a $1.9 trillion
stimulus plan last week to aid the economy and ramp up the
rollout of vaccinations against COVID-19.             
    Fed Chair Jerome Powell said on Thursday there was no reason
to alter the central bank's accommodative stance given the depth
of economic problems due to the pandemic.             
            
    Gold is considered a hedge against inflation and currency
debasement that can result from widespread stimulus.
    However, Commerzbank's Weinberg said a stronger dollar,
economic optimism and concerns about Janet Yellen as the U.S.
Treasury secretary nominee, who might be restrictive on the
fiscal stimulus side, were weighing on gold prices.             
    The U.S. dollar        touched a four-week peak against a
basket of major currencies, limiting bullion's appeal for
holders of other currencies.       
    Although U.S. inflation expectations have risen in
anticipation of more American fiscal stimulus, gold has not been
the sole beneficiary - bond yields have risen and weighed on
gold, Phillip Futures said in a note. 
    U.S. Treasury yields scaled a 10-month high last week.      
   
    Among other precious metals, silver        gained 0.6% to
$24.88 an ounce, while platinum        was up 0.5% at $1,078.52
and palladium        lost 0.6% to $2,368.45.

 (Reporting by Asha Sistla and Sumita Layek in Bengaluru;
editing by Kirsten Donovan and Jonathan Oatis)
  
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