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(Updates prices)

By Sumita Layek

Jan 14 (Reuters) - Gold prices inched lower on Thursday as U.S. Treasury yields rebounded on bets of a sizeable stimulus from incoming U.S. President Joe Biden, although concerns about rising inflation limited bullion's losses.

Spot gold fell 0.2% to $1,840.55 per ounce by 0729 GMT, while U.S. gold futures slipped 0.8% to $1,840.10.

Reports that Biden could announce a $2 trillion coronavirus relief aid plan later in the day, pushed benchmark 10-year Treasury yields near ten-month highs, and helped lift the dollar.

"Fiscal stimulus will help boost economic recovery, leading to rising real interest rates as well as bring up Federal Reserve's tapering hopes; on the flip side, it'll also increase the inflation outlook," said DailyFX strategist Margaret Yang.

So, gold will be struggling around these price levels as the stimulus will have both positive and negative impacts on it, she added.

Investors will also be focused on further clues on the U.S. monetary policy outlook when Fed Chair Jerome Powell participates in a virtual event, due at 1730 GMT.

The Fed said on Wednesday the U.S. economy was growing modestly, although the optimism was tempered due to a surge in coronavirus cases.

"Gold prices can continue to lift, but we also acknowledge the bear case scenario, where coronavirus vaccines roll out quickly and successfully lead to the pandemic coming under control through the year," said Lachlan Shaw, National Australia Bank's head of commodity research.

That can prompt the Fed to start contemplating the policy reversal a bit sooner, he added.

The U.S. House of Representatives passed a single article of impeachment accusing President Donald Trump of "incitement of insurrection", making him the first president in U.S. history to be impeached twice.

Silver rose 0.3% to $25.22 an ounce. Platinum climbed 0.6% to $1,100.53, while palladium eased 0.2% to $2,379.86.

(Reporting by Sumita Layek in Bengaluru; Editing by Ramakrishnan M. and Shailesh Kuber)

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