PRECIOUS-Gold firms on faltering dollar, stimulus hopes

* Platinum scales highest in nearly six years
* Dollar index at two-week low
* Fed Chair Jerome Powell's virtual speech due at 1900 GMT

(Updates prices)
By Sumita Layek
Feb 10 (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 package elevated bullion's
appeal as a hedge against inflation.
Spot gold XAU= rose 0.3% to $1,842.51 per ounce by 0811
GMT. Prices hit their highest since Feb. 2 at $1,848.40 on
Tuesday. U.S. gold futures GCv1 gained 0.5% to $1,846.60.
The dollar .DXY slipped to a two-week low against rivals.
USD/
"With U.S. yields holding steady, gold is moving inversely
to the U.S. dollar. 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 despite opposition
from Republicans over the price tag. "U.S. inflation numbers are key risk," Halley said, adding a
higher figure could cause a short-term spike in the U.S. dollar
and push gold lower. The January Consumer Price Index data is
due at 1330 GMT.
Higher inflation boosts gold but also lifts Treasury yields,
which in turn increases the opportunity cost of holding bullion.
US/
"Gold can struggle in the short term near the $1,850 level
... rising interest rates will continue to be a headwind to
prices," said Amit Kumar Gupta, portfolio management services
head, Adroit Financial Services.
Investors now await Federal Reserve Chairman Jerome Powell's
speech before a virtual Economic Club of New York event at 1900
GMT. Auto-catalyst platinum XPT= hit its highest since February
2015 at $1,208.50, and was last up 2.4% at $1,203.19.
A global economic recovery along with Biden's plans for
green energy could push the platinum market into a deficit this
year, analysts said.
Spot silver XAG= gained 0.3% to $27.29 an ounce, while
palladium XPD= climbed 0.3% to $2,326.88.