Gold prices edged higher on Thursday, supported by a subdued dollar, though elevated Treasury yields and caution in the run-up to a key U.S. inflation data and Federal Reserve policy meeting capped the non-yielding metal"s gains. Spot gold was up 0.2% at $1,785.87 per ounce, as of 0801 GMT, while U.S. gold futures were flat at $1,786.10 per ounce. The dollar index strengthened nearly 0.2%, but hovered close to Wednesday"s one-week low, making bullion cheaper for holders of other currencies. USD/ Bullion prices have flitted in the range of roughly $1,760 to $1,790 after last month"s fall below the key $1,800 mark as investors cautiously assess the pace at which the U.S. Fed is likely to accelerate its stimulus tapering. Reduced stimulus and interest rate hikes tend to push government bond yields up, raising non-yielding bullion"s opportunity cost. "An accelerated taper is probably already expected by the gold market, so the vulnerability is if the Fed"s tapering announcement surprises or exceeds expectations," said Nicholas Frappell, a global general manager at ABC Bullion, adding that increased risk appetite has dimmed interest in bullion. Investors" focus now turns to Friday"s U.S. Consumer Price Index (CPI) report, which could influence the Fed"s policy decision in its Dec. 14-15 policy meeting. Limiting bullion"s appeal, benchmark 10-year Treasury yields were hovering close to their highest level since Nov. 29 scaled on Wednesday. "Bullion is likely to find any forays above $1,800 to be transitory, considering heightened expectations for more Fed rate hikes in 2022," said Han Tan, chief market analyst at Exinity. "However, gold could see fresh bids if markets become fearful once more about pandemic-related developments or a ramp-up in geopolitical tensions between major economies." Spot silver fell 0.4% to $22.31 per ounce while platinum slipped 0.4% to $952.58 and palladium lost 0.3% to $1,849.92. (This story corrects to read one-week low (not high), paragraph 3) Reporting by Nakul Iyer and Seher Dareen in Bengaluru; Editing by Sherry Jacob-Phillips Our Standards: The Thomson Reuters Trust Principles.