PRECIOUS-Gold steadies as market awaits Powell remarks

(Adds analyst comment, updates prices)
* Fed Chairman Powell testimony due at 1600 GMT
* U.S. economy "much improved" - Powell on Monday
* Palladium good reflation alternative - analyst

By Asha Sistla
March 23 (Reuters) - Gold prices were little changed on
Tuesday as investors awaited comments on U.S. economic health
from Federal Reserve Chairman Jerome Powell and Treasury
Secretary Janet Yellen later in the day.
Spot gold XAU= was almost unchanged at $1,738.50 per ounce
by 0736 GMT, after declining as much as 0.5% earlier in the day
as the U.S. dollar strengthened along with Treasury yields. U.S.
gold futures GCv1 were up 0.1% at $1,738.90 per ounce.
"Based on current levels of Treasury yields as well as the
dollar, gold might have overshot its fair trading value. From
here, it looks increasingly difficult to rally, especially if
Treasury yields continue to rise," said Howie Lee, an economist
at OCBC Bank.
"This week after the dust is settled and we get a better
picture of how individual Fed members are thinking, we will
probably have a better idea of Fed's direction from here and
that would pave the way for gold's direction."
The U.S. economy is "much improved," Powell said on Monday,
but at the same time warned that the recovery was still "far
from complete." The dollar index .DXY was up 0.1% against a basket of
currencies, supported by firm U.S. Treasury yields. USD/ US/
Elsewhere, palladium XPD= slipped 1.1% to $2,587.69,
trading close to a more than one-year high of $2,755.18 hit on
March 18.
"Palladium provides a good reflation alternate because the
market is in such a massive deficit and it's projected to be in
a deficit in 2021 and the need is high," said Stephen Innes,
chief global market strategist at financial services firm Axi.
"You've got a deficit because of the mine closures, but it
is going to take a lot longer to repair ... now it's a couple of
months, which is going to continue to weigh on the massive
deficit we think is building."
Silver XAG= fell 0.6% to $25.61 and platinum XPT= was
down 0.3% to $1,179.32.