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* Biden to deliver a plan costing 'trillions' of dollars

* Dollar slips from three-week peak

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(Recasts, adds comment, updates prices)

By Shreyansi Singh

Jan 12 (Reuters) - Gold prices edged higher in a choppy trading on Tuesday as the U.S. dollar and Treasury yields eased, while prospects of higher inflation driven by more U.S. fiscal stimulus provided further support to the metal.

Spot gold was up 0.2% at $1,848.31 per ounce by 02:04 p.m. EST (1904 GMT). On Monday, prices touched their lowest level since Dec. 2.

U.S. gold futures settled 0.4% lower at $1,844.20.

"Investors' willingness to buy U.S. debt boosted confidence in U.S. assets as stocks rallied and the dollar slipped, both of which helped gold rally a bit," said Tai Wong, head of base and precious metals derivatives trading at BMO.

The dollar index slipped 0.3% against its rivals, while 10-year U.S. treasury yields fell to a session low of 1.146% after a strong 10-year auction.

"There's going to be a big stimulus package that should be supportive for the gold market, it can not only stimulate demand but also prompt ideas of some problematic price inflation," said Kitco Metals senior analyst Jim Wyckoff.

U.S. President-elect Joe Biden said Americans needed more economic relief from the COVID-19 pandemic and that he would deliver a plan costing "trillions" of dollars.

Gold is generally considered a hedge against the inflation and currency debasement that can result from widespread stimulus. However, higher bond yields have challenged that status recently as they increase the opportunity cost of holding non-yielding bullion.

While gold was still vulnerable in the short term to gains in the dollar and yields, "the macro picture is still positive for gold," said Nicholas Frappell, global general manager at ABC Bullion.

Silver gained 2.3% to $25.49 an ounce. Platinum

climbed 3.3% to $1,065.42 and palladium rose 0.4% to $2,381.18.

(Reporting by Shreyansi Singh, Brijesh Patel and Sumita Layek in Bengaluru; Editing by Dan Grebler and Mark Potter)

((Shreyansi.Singh@thomsonreuters.com; +91 8061823666/3590 (If within U.S. call +1 646 223 8780); Reuters Messaging: Shreyansi.Singh@thomsonreuters.com))