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PRECIOUS-Gold firms as softer U.S. dollar, yields lift appeal

    * Dollar pinned near one-month low 
    * Asian shares near 1-1/2-week highs
    * Silver eases off one-month peak

 (Updates prices)
    By Brijesh Patel
    April 19 (Reuters) - Gold edged higher on Monday, hovering
near a seven-week peak hit in the previous session, as a weaker
dollar and lower U.S. Treasury yields supported prices.
    Spot gold        was up 0.2% at $1,778.91 per ounce by 0640
GMT, after hitting its highest since Feb.25 at $1,783.55 on
Friday. 
    U.S. gold futures        were steady at $1,780.10 per ounce.
    "At the moment, the combination of a weaker U.S. dollar and
easing interest rates is supportive for gold, despite better
economic outlook," said Michael McCarthy, chief market
strategist at CMC Markets.
    "We've got the momentum. But of course we are at a very
important point having just got through that $1,765 level. While
we hold above the $1,765 level, the outlook for gold is positive
in the short term."
    The dollar index        was languishing near a one-month low
against its rivals, making gold less expensive for other
currency holders.       
    Benchmark U.S. 10-year Treasury yields edged lower towards
multi-week lows touched last week. Lower bond yields reduce the
opportunity cost of holding non-interest bearing gold.      
    Sentiment in equities remained upbeat as Asian shares
hovered near 1-1/2-week highs on expectations that monetary
policy will remain accommodative the world over.            
    U.S. Federal Reserve has reiterated its stance to keep
monetary policy accommodative until the crisis is over, while
Fed officials have said that any spike in inflation is likely to
be temporary.             
    "Inflation expectations are holding above 2.5% amid soaring
commodities prices. This along with Fed's dovish stance on the
monetary policy, is keeping the backdrop supportive for
bullion," ANZ analysts said in a note.
    Some investors view gold as a hedge against higher inflation
that could follow stimulus measures.
    Elsewhere, silver        fell 0.4% to $25.85 per ounce after
hitting a near one-month high in the last session. Palladium
       rose 0.1% to $2,781.29, while platinum        gained 0.8%
to $1,211.98.

 (Reporting by Brijesh Patel in Bengaluru; Editing by Uttaresh.V
and Shailesh Kuber)
  
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