 "Gold")
By Sumita Layek
(Reuters) - Gold rose on Wednesday, hovering near a one-week peak hit in the previous session, as a weaker dollar and rising hopes of a U.S. stimulus elevated bullion's appeal as a hedge against inflation.
Spot gold rose 0.3% to $1,842.41 per ounce by 0342 GMT. Prices hit their highest since Feb. 2 at $1,848.40 in the previous session. U.S. gold futures gained 0.3% to $1,843.50.
Making gold more affordable, the dollar fell to a near two-week low against rivals.
"With U.S. yields holding steady, gold is moving inversely to the U.S. dollar. That says to me this is not a gold story, rather it is a weak dollar story," said Jeffrey Halley, a senior market analyst at OANDA.
U.S. President Joe Biden's $1.9 trillion coronavirus relief bill is expected to pass through Congress with little changes despite opposition from Republicans over the aid's price tag.
"U.S. inflation numbers are the key risk tonight," Halley said, adding a higher figure could cause a short-term spike in the U.S. dollar and push gold lower."
Higher inflation data boosts gold but also lifts Treasury yields, which in turn increase the opportunity cost of holding bullion.
The January Consumer Price Index data is due at 1330 GMT.
Investors now await Federal Reserve Chairman Jerome Powell's speech before a virtual Economic Club of New York event at 1900 GMT.
Analysts largely expect Powell to reiterate the Fed's commitment to keep monetary policy accommodative.
Platinum hit its highest since February 2015 at $1,206, and was last up 2.3% at $1,202.04. Platinum is used by automakers for catalytic converter manufacturing to clean car exhaust fumes.
Global economic recovery along with Biden's push for green energy would push the platinum market into a deficit this year, analysts said.
Spot silver gained 0.8% to $27.41 an ounce, palladium climbed 0.4% to $2,327.81.
(Reporting by Sumita Layek in Bengaluru; Editing by Krishna Chandra Eluri)
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