PRECIOUS-Gold gives up early gains as firm bond yields offset weak dollar

* U.S. dollar at 3-week low
* U.S. CPI gains by the most in more than 8-1/2 years in
March
* Investors eye U.S. retail sales on Thursday

(Updates prices)
By Diptendu Lahiri
April 14 (Reuters) - Gold prices gave up early gains and
were flat on Wednesday, as weakness in the U.S. dollar due to
higher inflation was countered by some firming in Treasury
yields.
Spot gold XAU= was flat $1,743.01 per ounce by 0549 GMT,
after rising as much as 0.3%. U.S. gold futures GCv1 fell 0.4%
to $1,741.30 per ounce.
"Though the dollar is weaker this morning, but a slight
uptick in U.S. Treasury yields is keeping gold's upside movement
muted," said Margaret Yang, a strategist at DailyFX.
"The next big thing that investors are looking for is the
retail sales data on Thursday and if it beats forecasts, which
it is expected to... (It) will put some pressure on gold," she
said adding that the fall could be limited since gold has
double-bottomed at $1,680.
Consumer prices in the United States soared the most in more
than 8-1/2 years in March, setting off what most economists
expect to be a fleeting spell of higher inflation, supporting
bullion — a traditional inflation hedge. The U.S. dollar fell to three-week lows, making gold cheaper
for holders of other currencies, while a slight rise in Treasury
yields increased the opportunity cost of holding the metal that
pays no return. USD/ US/
Bullion was also supported by comments from Philadelphia
Federal Reserve President Patrick Harker who said the Fed will
not withdraw its funding just yet even as the U.S. economy could
expand by 5% to 6% this year. Gold must test the $1,760-mark, a former support turned
resistance, in order to attract new bullish-pattern traders and
push prices higher, Avtar Sandu, a senior commodities manager at
Phillip Futures, said in a note.
Silver XAG= rose 0.1% to $25.35 and palladium XPD= was
down 0.1% to $2,687.63 per ounce. Platinum XPT= gained 0.7% to
$1,163.73.