PRECIOUS-Gold scales 1-week peak as dollar falters, yields ease - Reuters

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    * Gold's trend seems to be to the downside- analyst
    * Investors await Powell's testimony to Congress
    * ECB signals discomfort on rising yields

 (Adds comment, details, updates prices)
    By Sumita Layek
    Feb 23 (Reuters) - Gold climbed a one-week peak on Tuesday,
bolstered by a weaker dollar and a retreat in U.S. Treasury
yields, while concerns of rising inflation further boosted
bullion's appeal as a hedge against inflation.
    Spot gold        rose 0.4% to $1,815.52 per ounce by 0304
GMT, after hitting its highest since Feb. 16 at $1,815.63
earlier in the session. U.S. gold futures        gained 0.3% to
$1,813.50.
    "One of the few assets that is more out of favour than gold
at the moment is the dollar... so that is supporting gold prices
by extension," said IG Market analyst Kyle Rodda.
    The dollar        hit an over one-month low, making gold
affordable for other currency holders, as investors await U.S.
Federal Reserve Chairman Jerome Powell's testimony to Congress
later in the day.                   
    Benchmark U.S. Treasury yields             eased from a near
one-year peak on Monday, reducing the opportunity cost of
holding non-yielding bullion.      
    "Gold's trend seems to be to the downside, and there's no
indication that it's reversing for now... until we get a real
spike in inflation expectations or a Fed that talks about
controlling the yield curve," Rodda said.
    Gold, often viewed as an inflationary hedge, rose 1.5% in
the previous session, as fears of rising inflation dragged
global equities lower.            
    The European Central Bank on Monday signalled that
policymakers are becoming uncomfortable with the recent surge in
government bond yields.             
    Gold was "well supported throughout the pandemic as
investors sought a haven for funds. But the tide is turning, as
interest rates start to rise and investors rekindle their love
of bonds," ANZ analysts said in a note.
    "However, fixed interest returns may be severely eroded if
inflation takes off."
    Silver        rose 0.3% to $28.23 an ounce, having earlier
hit a three-week peak at $28.31. Platinum        climbed 0.1% to
$1,273.10, while palladium        gained 0.5% to $2,406.41.

 (Reporting by Sumita Layek in Bengaluru; Editing by Rashmi
Aich)
  

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