* Bullion market appears to expect tapering eventually - analyst * Dollar eases off four-month high * U.S. 10-year Treasury yields slip from 1-month peak * Gold rose more than 1% on Wednesday (Updates prices) Aug 12 (Reuters) - Gold edged up on Thursday as fears of early tapering by the Federal Reserve eased after data indicated a slight moderation in U.S. consumer price increases, with a resultant dip in the dollar and bond yields lending further support to bullion. Spot gold was little changed at $1,751.27 per ounce by 1026 GMT, having recorded it biggest one-day percentage gain since May 6 on Wednesday. U.S. gold futures were up 0.1% to $1,754.00. Data on Wednesday showed the U.S. consumer price index rose 0.5% last month, in line with economists’ estimates and down from a 0.9% increase in June. For the gold market, the “immediate question is that of tapering, which some FOMC (Federal Open Market Committee) members have been suggesting could start as soon as late 2021. But the latest CPI numbers suggest that those arguments have weakened,” StoneX analyst Rhona O’Connell said. Fed Chair Jerome Powell said last month the current high inflation will ease “in coming months”. Meanwhile, the U.S. Senate passed President Joe Biden’s $3.5 trillion budget proposals, and “the prospect of raising the debt ceiling is again on the agenda. Both should be gold-supportive,” StoneX’s O’Connell said. While gold is considered a hedge against higher inflation, it is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion and boost the dollar. Buoying gold’s appeal especially for those holding other currencies, the dollar index was off a more than four-month high, while benchmark U.S. Treasury yields also slipped. “The (data) release had a clearly bullish impact on gold. The bullion market moved up, dragging silver along,” HSBC analyst James Steel said, adding gold still faces upside resistance amid hawkish comments from Fed officials. Elsewhere, silver fell 0.5% to $23.40 per ounce, platinum eased 0.5% to $1,012.09, and palladium rose 0.1% to $2,637.63. (Reporting by Arundhati Sarkar in Bengaluru Editing by Susan Fenton and David Evans)