PRECIOUS-Gold falls 1% as elevated U.S. yields hit safe haven appeal

* Fed Chair Powell reaffirms extended loose monetary policy
* SPDR Gold Trust holdings slip to lowest since May 2020
* Palladium scales more than one-month high

(Adds comments, updates prices)
By Diptendu Lahiri
Feb 25 (Reuters) - Gold prices fell 1% on Thursday as U.S.
treasury yields remained elevated, with bullion's safe haven
appeal also hit by bets for a faster global economic recovery.
Spot gold XAU= fell 0.9% to $1,788.56 per ounce at 1306
GMT, after falling as much as 1% earlier in the session. U.S.
gold futures GCv1 eased 0.6% to $1,786.90 per ounce.
"Rising Treasury yields on a better economic outlook in the
second half of the year is putting pressure on the metal," Bank
of China International analyst Xiao Fu said.
While gold is often sought as a hedge against inflation,
higher bond yields have eroded that status since they increase
the opportunity cost of holding bullion. US/ Goldman Sachs downgraded its 2021 gold price target to
$2,000/oz from $2,300/oz, and said the pace of the reflation and
Federal Reserve's policy moves will determine whether gold will
over- or underperform the forecasts.
Gold's dip came despite a weaker dollar and U.S. Federal
Reserve Chairman Jerome Powell's reiteration on Wednesday that
monetary policy would be unchanged until the economy gets back
to full employment.
"Overall, there are conflicting forces, we have the rising
yields, but a weaker dollar," Bank of China's Fu said.
Mirroring investor sentiment, holdings of the world's
largest gold-backed exchange-traded fund, SPDR Gold Trust GLD ,
fell to their lowest since May 2020 on Wednesday. GOL/ETF
"There are chances that once the market prices in all the
positive factors driving riskier assets, and they start
consolidating, gold might emerge back and hit the $2,000 level
again this year," said Sunilkumar Katke, head of currencies and
commodities at Axis Securities.
Among other precious metals, silver XAG= was little
changed at $27.97 an ounce. Platinum XPT= fell 0.8%, to
$1,258.76.
Palladium XPD= was up 0.2% to $2,441.82, having earlier
climbed to a more than one-month high of $2,454.05.

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Gold prices versus real yeilds https://tmsnrt.rs/3upm8Y9
SPDR holdings slip as gold prices ease https://tmsnrt.rs/3dJ7R2s
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