Aug 4 (Reuters) - Gold prices climbed over 1% to hit a fresh one-month peak on Thursday, underpinned by a retreat in the dollar and U.S. Treasury yields, as investors kept a close tab on U.S.-China tensions.

Spot gold rose 1.6% to $1,792.19 per ounce by 1:56 p.m. ET (1756 GMT), having risen to its highest since July 5 earlier. U.S. gold futures settled 1.7% higher at $1,806.90.

"As of late, yields are coming down slightly. That has been along with the dollar's recent weakness, one of the key benefits to gold," said David Meger, director of metals trading at High Ridge Futures.

The dollar's retreat bolstered gold's appeal among overseas buyers, while benchmark U.S. Treasury yields also slipped, reducing the opportunity cost of holding non-yielding bullion.

"We've seen some rising tensions between the U.S. and China, so (that's) one additional reason why gold has been well supported coming into the morning," Meger added.

China fired multiple missiles near Taiwan in its biggest ever military drills in the Taiwan Strait one day after U.S. House of Representatives Speaker Nancy Pelosi visited the self-ruled island.

Investors also took stock of data that showed the number of Americans filing new claims for unemployment benefits increased last week. Investors are now eyeing the U.S. non-farm payrolls report due on Friday.

"However, with nonfarm payrolls headlining the week tomorrow, our expectations of a stronger-than-anticipated report could quickly put a cap on the prevailing bullishness among gold bugs," TD Securities wrote in a note.

Elsewhere, spot silver rose 0.8% to $20.20 per ounce.

"Short covering in the futures market and some fresh chart-based buying are also featured today, as the near-term technical postures for both metals (gold and silver) have improved this week," Jim Wyckoff, senior analyst at Kitco Metals, wrote in a note.

Platinum jumped 3.4% to $928.71 while palladium rose 2.7% to $2,070.58.