Gold prices clawed back from a three-month low on Wednesday as the dollar and Treasury yields weakened, ahead of key U.S. monthly inflation data that could influence the Federal Reserve's monetary policy stance and impact demand for bullion.

Spot gold was up 0.6% at $1,849.245 per ounce, as of 0729 GMT, after hitting its lowest since Feb. 11 earlier in the session. U.S. gold futures firmed 0.2% to $1,846.40. Benchmark U.S. 10-year Treasury yields were down for a third straight session, lifting demand for zero-yield gold. The dollar eased, albeit at elevated levels, making greenback-priced bullion more attractive for overseas buyers.

Analysts expect a sharp pullback in monthly growth of the U.S. consumer price index (CPI) for April, due at 1230 GMT, cooling to 0.2% from 1.2% in the prior month, and an annual increase of 8.1%. U.S. central bank officials fortified on Tuesday their arguments for the swiftest series of interest rate hikes since at least the 1990s to combat inflation.

Gold is sitting at critical price support around $1,830 and if inflation is softer than expected, prices might bounce, with investors prioritising the data's impact on the Fed instead of bullion's role as a hedge, said Ilya Spivak, a currency strategist at DailyFX. If inflation is in line or even slightly hotter, which is the main risk, gold might break lower through $1,800 and possibly head towards the next big test at $1,680, Spivak added.

Rising short-term U.S. interest rates lift the opportunity cost of holding bullion. "The problem for gold investors and other commodities that have been used as an inflation hedge is that the Fed will at all costs raise rates to snuff out the inflation fires," said Stephen Innes, managing partner at SPI Asset Management.

Spot silver gained 1.6% to $21.59 per ounce, platinum rose 1.8% to $981.40, and palladium increased 0.8% to $2,082.46.

(Reporting by Bharat Govind Gautam in Bengaluru; Editing by Sherry Jacob-Phillips)