PRECIOUS-Gold edges lower as rising U.S. interest rates loom

* Dollar index touches its highest in more than a week

* Inflation fears cushion gold

* GRAPHIC-2018 asset returns: http://tmsnrt.rs/2jvdmXl

(Updates prices) LONDON, Feb 22 (Reuters) - Gold edged down on Thursday and held on track for its biggest weekly loss of 2018 as the dollar was boosted by minutes from the last U.S. Federal Reserve meeting that showed policymakers backed further rises in interest rates.

Spot gold was 0.1 percent lower at $1,322.91 an ounce

was in the red for a fifth straight session and earlier touched is lowest since Feb. 14 at $1,320.61.

U.S. gold futures were down 0.5 percent at $1,324.90

per ounce. Gold is highly exposed to interest rates, particularly in the United States, as rate rises lift the opportunity cost of holding non-yielding assets and boost the dollar, in which gold is priced. "The general tone of the FOMC minutes was hawkish and convinced about the strength of the U.S. economy and that the inflation target will be reached," said Carsten Fritsch, a commodity analyst at Commerzbank. "This was seen as a further sign that Fed is willing to increase interest rates further and more than expected."

The dollar index , which measures the greenback

against a basket of major currencies, was up 0.1 percent at 90.085, after it touched 90.235, the highest since Feb. 12. The greenback, which has risen over 1 percent so far this week, got a boost after minutes of the Fed's January meeting showed most policymakers believed inflation would perk up.

However, some analysts said concerns about rising inflation may be tempered by caution due to the recent market volatility. The opposing forces of higher inflation, which is good for bullion, and higher interest rates should neutralize each other and keep gold price pretty steady, analysts said. "Gold is precariously holding a trend-line from December 2017 lows at present, so we expect some support around here, especially with China back," said MKS senior precious metals trader Alex Thorndike. A break of the $1,322-25 area however, could see gold test the 50-day moving average of $1,319.25 then the 100-day moving of $1,298.50 if dollar strength persists, he said.

Among other precious metals, silver was down 0.3 percent at $16.44 an ounce, while palladium was up 0.7 percent at $1,027 an ounce and platinum was flat at


(Additional reporting by Eileen Soreng in Bengaluru, editing by David Evans)