PRECIOUS-Gold inches lower on dollar recovery, softer U.S. inflation data

* Chinese markets closed for new year holiday
* U.S. Jan Consumer Price Index came in lower than expected
* CME raises platinum futures margins by 10%

(Updates prices)
By Sumita Layek
Feb 11 (Reuters) - Gold edged lower on Thursday as the
dollar's recovery from a two-week trough hit in the previous
session and a softer U.S. inflation data dampened bullion's
appeal.
Spot gold XAU= fell 0.3% to $1,837.13 per ounce by 0636
GMT, after hitting a more than one-week high on Wednesday.
U.S. gold futures GCv1 slipped 0.3% to $1,837.40.
"The dollar has rebounded from Wednesday's low, that's
putting some pressure on precious metals. Low liquidity due to
Chinese new year holiday is also weighing on the prices," said
DailyFX strategist Margaret Yang. .DXY
Gold has also lost some support as U.S. data showed there is
not much of inflation down the road, Yang said.
The U.S. Consumer Price Index for January came in lower than
expected. Gold is considered a hedge against
inflation. U.S. Federal Reserve Chair Jerome Powell in a speech on
Wednesday emphasised on the need for fiscal policy and said it
is the not the right time to focus on federal debt
issues. Investors kept a close watch on the developments on the
passage of a $1.9 trillion U.S. relief
bill. "It's quite a mixed narrative right now," said Stephen
Innes, chief global market strategist at financial services firm
Axi.
"Too much stimulus in the market could force the Fed to
tighten the monetary policy, that's negative for gold, but if
the stimulus isn't big enough, gold is not going to benefit."
Autocatalyst platinum XPT= rose 0.3% to $1,244.84 an
ounce, having notching a peak since February 2015 of $1,250 on
Wednesday.
"The bottom line is there could be a shortage" as platinum's
demand surges for automobiles and fabrication, Innes
said. CME Group raised margins for platinum futures by
10%. Spot silver XAG= shed 0.5% to $26.86 and palladium XPD=
eased 0.6% to $2,340.94.