* Gold in oversold territory on technical front -analyst
* Holdings of SPDR Gold hit lowest since April 2020 on Monday (Adds graphic, updates prices)
March 9 (Reuters) - Gold prices rose on Tuesday, as a pullback in U.S. Treasury yields added some lustre to the metal after it hit a nine-month low in the previous session.
Spot gold rose 0.7% to $1,692.21 per ounce by 0703 GMT. Prices had fallen more than 1% on Monday to $1,676.10, their lowest since June 5.
U.S. gold futures climbed 0.7% to $1,690.30.
“Dip buyers have emerged after the 1.15% fall overnight and U.S. bond yields have slightly eased, which has provided support for precious metals,” OANDA senior market analyst Jeffrey Halley said.
U.S. 10-year Treasury yields edged lower, raising the appeal of holding gold. A steady rise in bond yields makes holding gold less attractive as investors typically tend to gravitate toward assets that generate steady income in the form of interest or dividend.
“In an environment of rising U.S. yields, growth recovery, vaccine rollouts, and investors getting more optimistic on growth prospects; demand for safe havens will struggle,” said Lachlan Shaw, National Australia Bank’s head of commodity research.
While the U.S. Federal Reserve has downplayed the rise in yields so far, the European Central Bank will discuss on Thursday the merits of intervening.
“Central banks will need to try and strike a balance between yields reflating in a reasonable fashion at a reasonable speed, compared to the recovery in economic activity, and so there may be tweaks along the way,” Shaw said.
Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, fell to their lowest since April 2020 on Monday.
“Gold’s short-term technicals have dipped into oversold territory, which should provide some temporary support over the session, however gains are likely to be limited to the $1,700 region,” OANDA’s Halley said.
Silver rose 0.8% to $25.30 an ounce. Palladium climbed 0.3% to $2,322.68. Platinum gained 0.8% to $1,144.49.
Reporting by Sumita Layek in Bengaluru; Editing by Anil D’Silva and Aditya Soni
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