PRECIOUS-Gold muted as markets wait for U.S. Fed meeting

    * Fed's two-day meeting starts later on Tuesday
    * Investors eye U.S. retail sales data at 1230 GMT
    * SPDR Gold Trust fell 0.2% on Monday

 (Adds comments; updates prices)
    By Diptendu Lahiri
    March 16 (Reuters) - Gold prices were subdued on Tuesday as
investors watched for a U.S. Federal Reserve meeting to tackle
concerns over inflation and bond yields, although appetite for
riskier assets grew on hopes of a swifter economic recovery. 
    Spot gold        was flat at $1,731.89 per ounce at 0324
GMT, while U.S. gold futures        rose 0.1% to $1,730.40 per
ounce.
    "The Fed may address rising inflation concerns and even
consider to push forward asset purchasing to compensate for the
rising yields and that would be very positive for gold prices,"
said DailyFX strategist Margaret Yang.
    "The overall sentiment is bearish, however, given the
vaccine optimism and the passage of the stimulus packages," she
added.
    Fed policymakers, in the upcoming FOMC meeting, are set to
forecast that the U.S. economy will accelerate at the quickest
rate in decades in 2021, with unemployment dropping and
inflation increasing, as the COVID-19 vaccine initiative ramps
up and a $1.9 trillion relief package is dispersed among
households.             
    "The strong recovery from the pandemic has been raising
concerns that the Fed may lift interest rates earlier than
expected... However, Chair Powell and his colleagues have been
quite persistent that maximum employment is far away, allowing
them to be patient," ANZ analysts wrote in a note.
    Easing of the recent selloff on bonds has helped stabilise
gold in recent days, ANZ said.      
    Putting further pressure on the non-yielding metal, Asian
stocks were expected to open higher on Tuesday on faster
recovery optimism.            
    Investors now eye the U.S. Commerce Department's February
retail sales data due on Tuesday, following January's 5.3%
surge.
    Data showed gold holdings in the world's largest gold-backed
exchange-traded fund, SPDR Gold Trust      , fell 0.2% to
1,050.32 tonnes on Monday.          
    In other metals, silver        fell 0.4% to $26.15, platinum
       was  up 0.1% at $1,213.46 and palladium        dropped
0.1 % to $2,385.61.

 (Reporting by Diptendu Lahiri in Bengaluru; Editing by Rashmi
Aich)