* Dollar hits a more than two-week peak * Platinum touches lowest level since November 2020 * Palladium hits its lowest level since August 2020 (Adds comment, updates prices) Sept 13 (Reuters) - Gold prices were steady on Monday as the dollar firmed, while investors were cautious ahead of U.S. consumer price readings that could be crucial to Federal Reserve’s decision on when to start withdrawing its asset purchases. Spot gold was flat at $1,787.96 per ounce by 0711 GMT, while U.S. gold futures fell 0.2% to $1,789.00. “There’s the belief that if inflation does run away, the Fed will have to stamp on it and that means faster tapering and interest rate hikes sooner than expected. That won’t be good for gold,” IG Market analyst Kyle Rodda said. Gold is in a range between $1,760 and $1,830 and that reflects a general indecision at the moment about virus, growth, inflation expectations and policy, Rodda added. Data on Friday showed U.S. producer prices increased solidly in August. The reading sent the benchmark U.S. 10-year Treasury yield higher and left gold down 2.1% for the week. Higher yields translate into higher opportunity cost for holding non-interest bearing bullion. The dollar index hit an over two-week high, weighing on gold’s allure for those holding other currencies. “Gold’s price action continues to be seriously underwhelming, unable to rally when the U.S. dollar falls and moving lower when it rises,” Jeffrey Halley, a senior market analyst for Asia Pacific at OANDA, said in a note. Gold needed to recapture and hold above $1,800 this week, preferably $1,830, to soothe the nerves of nervous long-positions, he added. All eyes are now on consumer price index for August, due to be released on Tuesday, which is likely to show core inflation easing slightly to 4.2%. Cleveland Fed President Loretta Mester said on Friday she would still like the central bank to begin tapering asset purchases this year, joining the chorus of policymakers with similar view. Platinum eased 0.3% to $952.25 per ounce after touching its lowest level since November 2020. Palladium fell 0.7% to $2,124.40, having earlier hit its lowest level since August 2020. Silver dipped 0.3% to $23.64. (Reporting by Eileen Soreng in Bengaluru; Editing by Rashmi Aich and David Evans)