Gold near two-week high as US Treasury yields drop on dovish Fed tone

* Minutes from Fed's September meeting due at 1800 GMT

* Focus on US CPI print on Thursday

* Benchmark US 10-year yields near two-week lows

Oct 11 (Reuters) -

Gold prices rose to a near two-week high on Wednesday, as U.S. Treasury yields extended their retreat after dovish comments from Federal Reserve officials indicated that interest rates may have peaked.

Spot gold was up 0.5% at $1,869.70 per ounce by 0956 GMT, its highest level since Sept. 29. U.S. gold futures rose 0.5% to $1,884.20.

"The comments from several Fed members saying the market is probably tight enough given the recent surge in bond yields is basically raising some speculation whether we have seen the peak in U.S. rates," said Ole Hansen, head of commodity strategy at Saxo Bank.

Atlanta Fed Bank President Raphael Bostic on Tuesday said the U.S. central bank need not raise borrowing costs further, while Minneapolis Fed President Neel Kashkari noted it is "possible" that further hikes may not be required.

Benchmark 10-year U.S. Treasury yields dropped to 4.5665%, moving further away from their 2007 highs scaled last week.

Lower interest rates put pressure on the dollar and bond yields, while increasing the appeal of non-yielding bullion.

"The attention now has been shifted to the Thursday's key U.S. CPI data even though the geopolitical risk factor is lingering in the background," said Kelvin Wong, senior market analyst for Asia Pacific at OANDA.

The Fed's latest policy minutes at 1800 GMT and U.S. inflation data on Thursday will be scanned for more cues on interest rate path.

Market participants also keept a close watch on the conflict between Israel and Palestinian Islamist group Hamas. Gold rose 1.6% on Monday as tensions in the Middle East lifted safe-haven demand.

"If we do get a benign CPI print tomorrow, we could see another significant down shift in bond yields and that would add some additional support to metals," Hansen said.

Spot silver rose 1.3% to $22.09 per ounce, platinum gained 0.3% to $882.83, and palladium was steady at $1,169.83.

(Reporting by Harshit Verma in Bengaluru; Editing by Varun H K)