* Platinum hits two-week low * Palladium rises to near one-month high * U.S. CPI rises 2.6% on year-on-year basis (Updates prices) By Shreyansi Singh April 13 (Reuters) - Gold prices bounced off a more than one-week low on Tuesday after data showing a sharp rise in U.S. inflation bolstered bullion"s appeal as an inflation hedge and weighed on the dollar. Spot gold climbed 0.8% to $1,745.94 per ounce by 1:42 p.m. EDT (1742 GMT), after earlier dipping to $1,722.67, its lowest mark since April 5. U.S. gold futures settled up 0.9% at $1,747.6. "We needed to see some inflation to get gold moving and we saw it this morning with that CPI number," said Bob Haberkorn, senior market strategist at RJO Futures, adding that a weaker dollar and retreating yields supported prices further. U.S. consumer prices rose by the most in more than 8-1/2 years in March, kicking off what most economists expect will be a brief period of higher inflation. The U.S. dollar slipped to three-week lows after the data, making gold cheaper for holders of other currencies, while benchmark 10-year Treasury yields also eased. Further supporting safe-haven gold were concerns raised by U.S. health officials" decision to recommend a pause in the use of Johnson & Johnson"s COVID-19 vaccine, analysts said. "At the moment, we need to see a decisive breakout above $1,765 in order to spark another wave of buying up to $1,800," said Phillip Streible, chief market strategist at Blue Line Futures in Chicago. "The $1,750 level has been a strong resistance, so we"re getting up near that level," he said, adding that geopolitical risk tied to news of Iran stepping up its nuclear enrichment had also sparked a lot of buying of gold and silver. Among other precious metals, silver rose 2% to $25.34 per ounce. Palladium gained 0.7% to $2,695.58 after climbing to its highest level since March 18 at $2,710. Platinum fell 0.9% to $1,158.98 per ounce, having earlier dipped to its lowest price in two weeks at $1,151.86. (Reporting by Shreyansi Singh and Eileen Soreng in Bengaluru Editing by Paul Simao and Matthew Lewis)