May 14 (Reuters) - Gold prices rebounded on Tuesday, helped by a pullback in the dollar and Treasury yields after data showed U.S. producer prices rose more than expected in April and suggesting inflation remained high.
Spot gold was up 0.7% at $2,351.30 per ounce by 1515 GMT after dropping 1% on Monday. U.S. gold futures rose 0.6% to $2,356.70.
"There's good support for gold still with all the geopolitical tensions... but the next move is going to depend on where we see the U.S. inflation numbers and any clarification on what the Fed will do with interest rates," said Chris Gaffney, president of world markets at EverBank.
U.S. producer prices increased more than expected in April amid strong gains in the costs of services and goods, leading traders to pare back bets of a first rate cut in September.
Gold is seen as a hedge against inflation, but higher interest rates increase the opportunity cost of holding non-yielding bullion.
The dollar fell 0.2% against its rivals after an initial jump following the U.S. data, making gold less expensive for other currency holders. Benchmark 10-year Treasury yields also crept lower.
Meanwhile, Federal Reserve Chair Jerome Powell said he expects U.S. inflation to continue declining through 2024 as it did last year and noted it was unlikely the Fed would have to raise interest rates again.
Focus now shifts to Wednesday's U.S. consumer price figures that could provide more clarity on Fed rate cuts this year.
Elsewhere, spot silver rose 1.1% to $28.49 per ounce and palladium gained 1.9% to $978.75.
Platinum was up 3.1% to $1,028, its highest level in a year.
"We expect platinum to outperform on rising autocatalyst demand, greater potential for investment inflow, and capex tightening in the South Africa PGM mining industry which could disproportionately impact platinum supply," Deutsche Bank wrote in a note.
Reporting by Rahul Paswan and Brijesh Patel in Bengaluru; Editing by Krishna Chandra Eluri
