* Benchmark 10-year U.S. Treasury yields rise above 1.6%
* Dollar drops to near seven-week low
* Spot gold may slide into $1,744-$1,758/oz range -
technicals
(Recasts, update prices)
By Brijesh Patel
April 20 (Reuters) - Gold eked out some gains on Tuesday
buoyed by a weaker dollar, although prices were hovering below
Monday's seven-week high as a rebound in U.S. Treasury yields
weighed on bullion's appeal.
Spot gold was up 0.1% at $1,771.53 per ounce by 0447
GMT, after hitting $1,789.77 on Monday, its highest since Feb.
25.
U.S. gold futures rose 0.1% to $1,772.40 per ounce.
"Gold came off yesterday's high against a backdrop of rising
yields. But the rise in yields didn't echo into the dollar. The
greenback's soggy performance is supportive for gold," said
DailyFX currency strategist Ilya Spivak.
The dollar index dropped to a near seven-week low
against its rivals, making gold less expensive for holders of
other currencies.
However, benchmark 10-year U.S. Treasury yields
rose above 1.6% after hitting a five-week low last week,
increasing the opportunity cost of holding non-yielding bullion.
U.S. President Joe Biden met on with a bipartisan group of
lawmakers who have all served as governors or mayors, as the
White House seeks a deal on his over $2 trillion jobs and
infrastructure proposal.
Gold is seen as a hedge against inflation that could follow
stimulus measures, but higher Treasury yields have dulled some
of the appeal of the non-yielding commodity this year.
"As it comes to inflation, the more inflation we get and the
less the Federal Reserve is able to ignore that, the worst for
gold it is... Technically, gold's trend is still pointing
lower," DailyFX's Spivak said.
Although the U.S. central bank has reiterated its stance to
keep monetary policy accommodative some time, Fed officials have
said any spike in inflation is likely to be temporary.
Spot gold may slide more into a range of $1,744-$1,758 per
ounce, following its failure to break a resistance at $1,785,
according to Reuters technical analyst Wang Tao.
Silver gained 0.5% to $25.93 per ounce, palladium
dropped 0.9% to $2,787.18 and platinum was steady
at $1,206.28.
(Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu
Sahu)
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