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PRECIOUS-Gold subdued as U.S. Treasury yields stay elevated

    * U.S. 10-year yields hit one-year high
    * Palladium hits more than one-month high 

 (Updates prices)
    By Brijesh Patel
    Feb 24 (Reuters) - Gold pared some losses after dipping more
than 1% earlier on Wednesday, helped by dovish comments from
Federal Reserve Chair Jerome Powell, but bullion struggled for
traction as elevated U.S. Treasury yields dampened its allure as
an inflation hedge. 
    Spot gold        was down 0.4% at $1,798.10 per ounce by
02:30 p.m. EST (1930 GMT), after dropping as much as 1.2%
earlier in the session. 
    U.S. gold futures        settled down 0.4% at $1,797.90.
    "Rising bond yields continue to weigh on the gold market.
Gold has not found any path to a sustainable recovery even with
talks about additional stimulus measures," said Phillip
Streible, chief market strategist at Blue Line Futures in
Chicago.
    U.S. benchmark 10-year Treasury yields             touched
1.4% for first time since February 2020. Rising yields tend to
hurt bullion's appeal as an inflation hedge since they increase
the opportunity cost of holding the metal.
    Powell on Wednesday reiterated that U.S. interest rates will
remain low and the Fed will keep buying bonds to support the
U.S. economy.             
    In his testimony before the U.S. Senate on Tuesday, Powell
said monetary policy still needed to be accommodative, with
economic recovery "uneven and far from complete."             
    "Over the last two days a very dovish and hence
risk-friendly Powell has cheered the stock market which is
bearish for USD and as such has given gold a little breathing
space," said Tai Wong, a trader at investment bank BMO in New
York.            
    The dollar index        was hovering near a more than
one-month low against its rivals.       
    Investors kept a close watch on developments over a $1.9
trillion U.S. coronavirus relief package, which could contribute
to a speedy economic recovery but at the cost of rising
inflation.
    Elsewhere, silver        rose 0.7% to $27.82 an ounce, and
platinum        climbed 1.7% to $1,258.50.
    Palladium        jumped 3.5% to $2,431.60 an ounce, its
highest level since Jan. 15.

 (Reporting by Brijesh Patel in Bengaluru; Editing by Jonathan
Oatis, Matthew Lewis and Hugh Lawson)
  
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