PRECIOUS-Gold shrugs off higher yields, dollar after Powell testimony

(Adds comments, updates prices)
* Dollar index hits four-month high
* Gold unlikely to rise above $1,700-$1,750 in near term -
analyst
* Treasury yields gain from 1-week low

By Nakul Iyer
March 24 (Reuters) - Gold gained on Wednesday, taking an
uptick in U.S. Treasury yields and the dollar in stride, as the
safe-haven metal drew support from Federal Reserve Chair Jerome
Powell's repeated calls to keep low-interest rates pinned near
zero.
Spot gold XAU= rose 0.4% to $1,734.36 per ounce by 1:54
p.m. EDT (1754 GMT). U.S. gold futures GCv1 settled 0.5% up at
$1,733.20.
"The Fed said that despite the fact that we could see some
higher inflation, they will look past it so that ultimately
means we could see a spike in inflation and the Fed remaining on
the sidelines ... those factors are helping gold here," said
Bart Melek, head of commodity strategies at TD Securities.
Fed chair Powell told lawmakers on Tuesday he expected some
inflation but that would be "neither particularly large nor
persistent." The U.S. central bank pledged to keep interest
rates anchored near zero in its policy meeting last week.
Gold's gains came despite benchmark 10-year U.S. Treasury
yields and the dollar ticking up. A stronger dollar makes
holding gold more expensive for other currency holders. USD/
While gold could rise to $1,900 again, a strong dollar,
which is unlikely to weaken in the near term given lockdowns in
Europe and the potential outperformance of the United States
versus other economies, remains a headwind for gold, Melek
added.
Higher yields have also challenged gold's status as an
inflation hedge since they translate into higher opportunity
costs of holding the non-yielding commodity.
Gold is unlikely to move out of the $1,700-to-$1,750 range
until later in the year when growth and inflation likely stalls
with investors likely favouring assets and commodities that
track higher inflation until then, said Phillip Streible, chief
market strategist at Blue Line Futures in Chicago.
Elsewhere, palladium XPD= gained 1.2% to $2,635.19 per
ounce and silver XAG= rose 0.2% to $25.12. Platinum XPT=
climbed 0.4% to $1,172.82.