PRECIOUS-Gold dives 2% as U.S. Treasury yields gain after Fed comments

* Silver falls over 3%
* Interactive graphic tracking global spread of coronavirus:
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(Adds comments and updates prices)
By K. Sathya Narayanan
Aug 27 (Reuters) - Gold slumped over 2% on Thursday as U.S.
Treasury yields rose after Federal Reserve Chair Jerome Powell
laid out an aggressive new strategy to reach the bank's 2%
inflation target.
Spot gold XAU= fell 1.1% to $1,931.96 per ounce by 02:49
pm EDT (1849 GMT). Prices had risen as much as 1.1% during
Powell's speech.
U.S. gold futures GCv1 settled down 1% at 1,932.60.
"The Fed had a chance to update their forward guidance and
signal that the labour market may warrant more support but we
really didn't get that," Edward Moya, senior market analyst at
broker OANDA said.
"We're probably going to see the stimulus trade unwind a
little bit here and while this has really prompted a strong move
with the Treasury curve and the dollar, this provides us with a
frustrating consolidation (in gold)."
Longer-term U.S. Treasury yields moved to their highest
levels in months after Powell's remarks. US/
In a widely expected move, the Fed said it will seek to
achieve inflation averaging 2% over time, offsetting below-2%
periods with higher inflation "for some time" and rolled out an
aggressive new strategy to lift employment. The Fed made no explicit promises on how long it may keep
rates low, or how high it would allow inflation to go.
The Fed had pumped in massive stimulus and kept interest
rates near zero to lift the U.S. economy from the impact of the
coronavirus. "We expect support for gold prices to remain firm, as
Powell's comments clearly reflect that the economic recovery
from the COVID-19 crisis will be long and gradual, with ample
central-bank support necessary to avoid backsliding," said
Cailin Birch, global economist at The Economist Intelligence
Unit.
Elsewhere, silver XAG= was down 1.8% at $27.01, having
fallen over 3% earlier.
Palladium XPD= declined 1.2% to $2,171.70 and platinum
XPT= fell 0.9% to $920.41.